Over the last 10 years we have seen the emergence of Life According to Credit Scores. Where the heck does this Credit Score come from, why does it only take a few missed payments to completely destroy, and why does it take forever to repair?

We have to face the facts. Our Credit Scores determine a tremendous amount. Everything from being able to avoid paying a large deposit for our utilities, getting a Credit Card with the best interest rates and lowest fee's, plus getting a hastle free mortgage approval when we want one! Our Credit Score has now become one of the most important things for us to monitor, improve and protect.

What can have a negative impact on a Credit Score? Missed payments and unpaid accounts. That's a sure fire way to chop your score. And regardless if it's large or small, your rating will fall like a brick off a skyscraper. Avoid missing payments at all costs.

Secondly, watch your credit card balances. Yes, many people pay off their credit cards in full every month. Yet, they never receive the benefit of an increase credit score. Why? Well, our credit scores are computer determined and our debtors computers simply send our account information, off of our monthly statements, to the credit reporting agencies. Then, the Credit Reporting agency's computer adds up all the credit available to you, as compared to all the money you owe and determines how your credit life is! So, for example, if your Visa statement comes in and you owe $1000. and your limit is $1,500.00, the computer determines that you have used up 2/3rds of the credit available to you, and that is not good, even though you're paying it off as soon as you get your statement. Your credit rating will not go up, and in fact, it may even go down, because the Computer feels you could be a risk if you're using so much of your available credit. The best way around this is to pay your Credit Card before you get the statement, so each month your statement has a balance of less than 30% of your limit, or better yet, you owe nothing! Now, your credit worthiness will be truly reflected, and your rating will go up!

In 2007, a good credit rating is important to everyone. Understanding how the system works is equally important. Enjoy an improved credit rating with this one easy step and you'll be on your way to better interest rates!