We all want good credit. With good credit you get better interest rates, more opportunities, a better house, or car and so much more. But is it hard to get good credit? Not at all. It takes a bit of common sense and some discipline with your money and credit cards.

Before we get to talking about how to raise your credit score, lets talk about what a credit score exactly is, and it is used. Known in the industry as the FICA score, it is a scale used by lenders that determines the risk of a borrower defaulting on their financial obligation. That`s the good news, the definition is easy to find, the bad news, no one, except FICA, knows the algorithm used to determine your score. However, professionals have determined certain steps you should follow in order to get your score raised, and this has been determined from their years of experience. We will get to that in a moment.

One question you hear is, is credit a bad thing. Although when used wisely it is not, those who do not have the self discipline should limit themselves to one card with a small limit on it, and stay away from cards that offer no limit, but need to be paid in full each month. Jillian Mincer reported in the Wall Street Journal that, "there is an impact of the U.S. credit market crisis based on credit score." That is how important your credit score is.

So you run up a few cards, pay some of them late, your score tumbles, but what do you care, you already own a house or that car etc., so you could care less. Not so says Mincer, who says that your credit score can affect potential employment, insurance rates and more. Mincer claims, "A low credit score could cost additional finance charges and could prevent access to credit and insurance and even affect employment prospects." Apparently some companies frown on individuals who have bad credit, because they may have to work an additional job which in turn may lead to being tired more often, additional stress and so on.

Do not blink now, a report in the Wall Street Journal suggests that consumers need an even higher credit score than they did in the spring 2007 to get the best interest rates on loans. Banks and financial institutions are clamping down on who they lend their money to.

So what is the solution? It is a lot more simple than you think. Consumers can raise their credit scores by paying bills on time, not maxing out your credit card or cards in the case of some consumers and paying off debt in full.

You will want to talk to your tax advisor to see if consolidating is the way to go. One thing is for sure, if you do not have the self control of not spending, all experts agree, cut your cards up, limit yourself to one card for emergencies and cancel the others.

By: Michael C. Poodles