According to Experian’s National Score Index, the average American credit score was 678, back in April of 2008.  Out of a possible 850, that doesn’t sound too bad right? You pay your bills on time, and try not to have too much debt. You should be well in the range of 650-680.

Sorry to burst your bubble guys, but nowadays, having a 680 score doesn’t mean too much! You will still get financed, but you would be required to put down a large down payment, and/or get charged a higher interest rate. And if your score is below 620, then you might even have a tougher time getting a loan.

So, what, exactly, is “good’ credit?” I went online to check my score and found this info:

- 720-850 – Excellent – This represents the best score range and best financing terms.
- 700-719 – Very Good – Qualifies a person for favorable financing.
- 675-699 – Average – A score in this range will usually qualify for most loans.
- 620-674 – Subprime – May still qualify, but will pay higher interest.
- 560-619 – Risky – Will have trouble obtaining a loan.
- 500-559 – Very Risky – Need to work on improving your rating.

Having recently spoken to a lender with a prospective client here in California, to qualify for the best rates, a person’s credit score had to be at least 720 and put down 15-20% of the loan amount. Crazy right? This just goes to prove my belief that the “system” is meant to keep the poor poor and the rich rich.

Never fear folks, I will disclose some tips for you to up your credit score, and reach that 720 in no time. The down payment, however, we will save for another time.

The first important tip is regarding your credit cards and the available credit limit. Having a large available credit on a credit card, is not always the best. The credit bureaus will still consider that the “potential” amount you can owe.  So, my tip to you is to refuse the periodical credit increases to your credit cards that companies will offer to you. You will “have” less to spend, and therefore spend less, and your credit score will not be bogged down by these, “potential debts.”

My second tip is a fairly obvious one, but many people tend to overlook it. Balance your checkbook regularly to prevent checks from bouncing. Too many bounced checks can have a negative impact on your credit report. It also keeps you aware of your financial situation and allows you to avoid potential pitfalls.

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