As the economy continues to go downhill and with the collapse of many mainstay financial institutions, the time to be putting effort into raising credit scores has never been greater.
In fact, even in the tight financial market, most consumers are totally unaware, even oblivious of what they should be doing or even what they CAN do to improve credit scores.
Consumers need to come face to face with the reality that for the most part, the days of easy credit are as far gone as the horse and buggy.
Now more than ever before, the consumer needs to take charge of his or her credit score.
It is no longer just a good idea, but doing so is virtually mandatory for many more areas of your life than you even realize that use your credit score to make a decision about you.
For example, did you realize that many car insurance companies are now using an applicant's credit score to determine what insurance premiums to charge? The insurance companies claim to have proof in the form of years of study of millions of claims that show that people with lower credit scores make more claims.
Remember, the insurance companies make all their money based on statistical evidence, and although consumer rights advocates are up in arms about this move, it is entirely legal since one cannot argue with the statistics.
Job applicants are also having their credit score pulled before they are offered a job at more and more companies every day.
If a potential employee appears to be financially irresponsible via a low credit score, it can turn out where you don't get that fabulous new job, or if you do, the salary offer is less than what they may have offered if you had a higher credit score.
And of course there is the more obvious drawback, where a lower credit score is going to result in you getting higher interest rates on a mortgage loan, a car loan, credit cards, or even not being approved for any of these.
On a car loan or mortgage, your loan may be approved but the lender is going to require a much larger down payment.
Remember, the lending industry is based on the lender's perceived RISK of granting your loan.
If that risk is perceived as higher based on a low credit score, then the lender will make up for that increased risk by requiring a larger down payment and/or charging a higher interest rate to accommodate that higher risk.
The other thing about credit scores that most consumers are not aware of is the fact that most credit reports contain errors.
Your credit history may have gotten merged with someone else's record, which is a very common occurrence if you have a rather common name.
Clerical error also accounts for many of these mistakes.
The end result is that your credit score may be calculated as being lower than it should because of these errors, which do NOT auto-correct over time.
In fact, they do not correct at all until YOU discover the error and bring it to the attention of the credit bureaus.
Even at this, there is a right way and wrong way to do this, since some consumers with legitimately negative entries on their credit report are challenging those errors as inaccurate, where they simply hope that their challenge will make that negative entry go away, which it won't.
Understand that you have control over your credit report and there are many things you can do to increase your credit score.
Your credit score is much more than simply paying all your bills on time.
While that is a major component of the score, it is certainly far from being the only one.
Get copies of your credit report from each of the three credit reporting bureaus so that your credit score is as high as it can and should be.
The time and effort you invest in doing this will definitely pay off for you in the long term.