According to the credit experts, only 40% of the population has really good credit. That would be someone with a score over 700 in all 3 major reporting bureaus. This Prime Credit standing is a perfect place to be for a couple of major reasons. Minor incidents like inquiries and single late payments will probably not drop your score.

A credit score of under 700 from all three of the credit bureaus means that you will be perceived as a higher risk (as are 60% of consumers) and in this case, it’s hard to tell just what will affect your credit score and whether it will be for better or worse. For example, getting a loan under these conditions may actually decrease your score!

The whole idea of the credit bureaus is to make it extremely difficult to score over 700. Why? Because this means more money for lenders who can then charge higher interest rates. If your score is under 700, then you need to get your score over this magic number quickly using a system which works for you, instead of for all of those businesses who are getting more of your money than they’re really entitled to.

You can help to protect your credit score by keeping your debt to less than 25% of your annual net income. Check your tax return or ask your accountant if you’re unsure of this figure. When you make a purchase on credit, always ask yourself if this is truly a necessity and keep your debt under that 25% limit.

There are inherent flaws in the credit reporting system we use; the problem is that the credit bureaus themselves profit from the system. For years now, consumers have clamored for some sort of reform. The 2004 Fair Credit Reporting Act did resolve some problems, but didn’t solve the real issues, and definitely didn’t make any difference in the accuracy of the information the bureaus maintain. Worse still, it’s unclear whether this law is really enforced at all.

For instance, let’s say that you have a credit score of 600 and you’re applying for a loan. Whether or not your loan application is approved, your credit score drops by 35 points! If you had a credit score over 700, then your credit score would have been unaffected by this inquiry. A fast score system can help you to get your score over 700 so you can avoid all of these hassles.

You should be very careful about credit repair services as well. While they can indeed have some of the negative items on your report removed, be aware that this can actually lower your credit score. If your credit score is under 700, you’re better off not removing these items at least not right away. Instead, add new accounts in good standing to balance out the negative items. Your concern should be improving your credit score instead of simply making your report “look” better.