Want a good score? Well it is no surprise that paying down credit card debt is key.

A new report shows over the past two years, the amount of Americans with FICO scores at 600 or below, has risen. About 25% of the U.S. adult population has a low credit score and will have to pay high interest rates on any credit that they need; auto loans, mortgages, business loans, and credit cards to name a few.  

With a score of 600 or lower, you may even find it to be difficult to get approval for loans at all. So, what should you do if you find yourself in this “600 or below” category?  First, Don’t Despair!

Obviously, you are not alone, but you should be determined to raise your score so you can be financially successful and not bound to pay banks buckets of money if you need a loan or a line of credit.  Paying credit card bills on time should be a priority as this makes up the largest part of your credit score. 35% of your credit score is simply paying your bills on time! Doing this can improve your credit score and maintain it over time. You also need to look at your credit utilization, or put simply, how much credit you use and for what; car loans, mortgages, credit cards, etc. 

Since the 2008 recession, lenders have become stricter with their standards for applicants. A survey released by FICO found 46% of bank risk managers predict qualifications to grow even tighter, which really should be no surprise to anyone considering the recent events of the banks being bailed out, the housing crises, and the high unemployment rates.

If you have no idea what your credit score is then go to Credit.com and use their Credit Report Card. This is a free and fun web interface that will give you a letter grade and a number range of what your credit score is. The Credit Report Card is a completely free, unbiased tool to help you clearly understand the five main areas that make up your credit scores that lenders, employers, and others use to make important decisions about your financial life. You have to fill in some private information to see your results but they use a secure server to protect your information. Once you find out what where you stand in the eyes of creditors, then you can take action to make your score better.  

In order to ride out the slow economy, you need to make a valiant effort to improve your credit score so when the economy rebounds you will be privy to the best credit and loan rates around.  Each year you are entitled to get a free credit report from each of the credit reporting bureaus; so if you have not gotten yours yet, do it today!

Contact information for the three credit bureaus:

• Equifax Information Services 1-800-685-1111 – P.O. BOX 740256, Atlanta, GA 30374
• TransUnion 1-800-916-8800 – Customer Disclosure Center, Trans Union Consumer Relations, P.O. Box 2000, Chester, PA 19022-2000
• Experian 1-888-397-3742 – NCAC P.O. Box 9556, Allen, TX 75013 

You can also go to annualcreditreport.com to get your reports; this government website makes it easy and fast to get your credit reports. So, get going and set out to get a great credit score this fall season!

About the Author

The following blog post is from April Lewis-Parks, the director of education for Consolidated Credit She is a certified credit counselor and a consumer affairs advocate who is dedicated to generating awareness about personal finance issues. She is on the education advisory committee of the JumpStart Coalition, which is dedicated to furthering financial literacy for the youth and she is active in the South Florida chapter of Junior Achievement which promotes entrepreneurship and financial literacy through hands-on programs.