Credit Scores Undergo A Reality Check

By Dan Bewley and Terry Hood, The News On 6

UNDATED -- The financial crisis is causing lenders to be leery of who should have access to credit.  The News On 6 puts credit scores to the reality check and has important information you need to know before looking for a loan.

The economic turmoil has raised the bar for what's considered a good credit score.

The Consumer Credit Counseling Service says earlier this year it used to be 720, but now a good score needs to be 750 or above.  The number is calculated using a number of factors.

The biggest, at 35% of the score, is whether you pay your bill on time or if it's paid late.  Another important detail is the amount of outstanding debt; this includes car loans, credit cards, or mortgages.  Lenders also want to see how long you have had credit, the longer the better.

Here are some tips maintain a good credit score.

One of the most important, don't spend more than 30% of your available credit.  Don't take on new credit for special offers, like 10% off a purchase or to get a free T-shirt.  Lenders look at how much credit you have and the more plastic, the greater the temptation.

And, don't close old accounts, even those you haven't used in years.  Remember the longer you have used credit the higher your score.