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Unless you are going to pay for your house or car in full in cold, hard cash, you should first make sure that you have a good credit standing. Otherwise, forget about buying a house or a car and concentrate on improving your credit rating first. • If you have a good credit standing, there is a chance that your loan application will be approved. As long as you use your credit card on items you would normally buy and could normally afford then you will do fine. However, you do want to establish a small debt and be able to show you can service it responsibly. A common myth that many old timers carry is that you must always pay back the exact amount of money that you've borrowed at the end of the month.

In fact, DailyDollar offered congratulations to U.S. March when statistics were released by credit reporting agency TransUnion about decreasing credit card balances. “Despite consumers’ best efforts to reduce debt, credit scores continue to decline,” said Ken Lin, CEO of Credit Karma. Now that you know which state has the highest credit scores, let’s look at the flip side of the coin. The average credit score stats were the lowest in Mississippi (632). Earlier this year, DailyDollar shared information about a new Mississippi payday loan law that lowers fees for consumers.

Also accounting for 10% of your overall score is the type of credit that you are using. You should try to stay away from finance companies if at all possible, because this can lower your credit score. For the best credit score, you should have around four revolving accounts and also have installment credit history. How you are using credit is the next most important factor, weighing in at 30% of your overall score. This is called your credit utilization ratio it is determined by looking at how much credit that you have available to you versus what you are using. If you are trying to have the highest credit rating possible, you should try to avoid carrying credit card balances.

Bottom line - the better your credit score - the more money you save.

Why should you want to get the highest credit score possible, If you want to appeal to one or more lenders or creditors, you will get more of their money if you have a high credit score. Bottom line - the better your credit score - the more money you save. It is important to check your credit with a soft pull by pulling it yourself. There are sources online that can assist you with this and many even are free to use for a few weeks. Pulling your credit is important because a credit profile can change on a regular basis going up or down.

• One the error has been corrected - request a new copy of your credit report
• Begin a log of correspondence
• Send a letter to the credit-reporting agency disputing the error
• If you still get no response - contact the FTC (Federal Trade Commission)
• If nothing happens or you get no response - send a second letter requesting an investigation
• Order or request your credit report. (You are entitled to one FREE credit report per year.)
• Give it 30 days
• Give it 30 more days or 45 days if you provide additional information)

While 850 may be the highest score that you can get, anything above a 700 is considered to be good. If you go above 700 into the 750 range, your score is considered to be excellent and minimal risk. FICO, or the Fair Issac Corporation is the company that created the system of the credit score. The credit score is based upon a formula, which incorporates every aspect of your spending into it. How much debt you are in and spending habits are also ways that can your score can either be increased or decreased.