- By Bob Williams

In these economic times, it pays to have a good or high credit score.  Unfortunately, also in these economic times, most of us have some financial worries or gaps in our credit history.  When you get a low or bad credit score, it can affect almost every aspect of your financial life.  Negatively.  It can also be difficult to recover from, if you don't change your 'credit habits.'  Why is a credit score so important, how is it evaluated- and what can I do?  Look here:

Why a Credit Score Counts

Your credit counts more than just your credit cards, and swapping amounts back and forth between them.  If you: want to buy a house, a car or get any type of loan- you could either wind up paying extremely high interest (because you're a financial risk, and you have to pay for the assurance) or you'll be turned down.  Even smaller things- a bad credit score can mean you miss out on that great apartment, or that you pay double for electricity and telephone bills.  Almost anything involving money 'trust' can only be proven by a good- not a bad- credit history.

How Is My Credit Score Evaluated?

The credit agency (there are both public and private services that provide you with a copy of your credit score) evaluates your credit history.  Your entire credit history to now.  Missing a payment once or twice, no problem.  Being late for every single payment over a year is a big no-no for your credit history.  How much you owe, right now, at this moment is also important.  Are you completely swamped, with thousands owed, or are you caught up on all of your payments?  The length of your credit history- younger people get higher interest, since they've no proof of being financially reliable, for example.  And any new credit, and your paying relationship towards them.

How Can I Improve My Credit Score?

Very, very simply:  prove yourself, over time.  Pay all of your bills on (or even before) they're due; try to get any and all credit cards to their minimums, if not paying them off completely and canceling them altogether; and (finally!) finish paying off all of the debts that you owe.  This improves your credit score, and if you are consistent you can actually change your bad credit score to good- which means paying less interest, generally.

It might be easy to blow off a bad credit score, until you try to apply for a loan and get turned down.  Right when you really need the help.  It's a much better idea to start taking care of your credit score now, rather than waiting for a yes or most likely- no.