Fifteen years ago it didn’t matter.

You applied for as much credit as you wanted, and as long as you paid your bills on time, your credit rating was good. That’s all changed. You are now scored.

Lenders now use credit scoring to determine not only if they will offer you credit but also what interest rate, they will offer you. So depending on that store, you may pay tens of thousands of dollars more or less on your home mortgage, thousands of dollars more or less on your auto purchase, or thousands of dollars more on business equipment purchases.

Even insurance companies now use credit scores to determine who they will or won't insure and how much they'll charge. In fact, your credit score is now one of the most important numbers in your life.

Until recently, these credit scores and the means by which they are calculated was a closely guarded secret kept from consumers. At the beginning, you were able to get access to your scores. Right now, you can get all three of your credit scores, a detailed report explaining your scores, and more helpful information at www.myfico.com/12. And this inquiry will NOT lower your credit scores, as many types of credit inquiries do. Of course, knowing your scores is one thing, knowing what to do about managing and improving them is another. As an entrepreneur, busy and occupied with your regular business responsibilities, you may immediately think this too trivial to justify your time and attention. You'd be wrong.


Actually, one of the easiest, quickest, and surest ways to improve your lifestyle is to deliberately improve your credit scores. You can live wealthier for less, by paying the lowest possible interest on everything. And if you happen to be a real estate investor, this takes on even greater importance and value.

Most people unknowingly make major mistakes that negatively affect their credit scores. Many seem like the right things to do, yet they actually lower your credit scores instead of improving them.

Some of the most frequently made mistakes are:

• Having unnecessary credit inquiries
• Using lenders that do not report your credit accurately
• Maxing out credit card limits
• Closing credit accounts
• Using cash
• Transferring credit card balances to get a better interest rate
• Paying off installment credit accounts early
• Not increasing credit limits when you can
• Using personal credit for business - something entrepreneurs tend to be sloppy about!

Management of credit scores is one of the things most entrepreneurs overlook as a serious wealth strategy. Simply put, you can spend a lot less for the lifestyle you want by paying a little bit of attention to managing your credit scores, credit, and debt wisely - leaving more money available to invest, to build wealth.