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These days, it’s not about who has the flashier designer clothes or the faster car – it’s about who has the higher credit score! That’s because the better your score, the better position you’re in to manage your financial future.

Why? Believe it or not, have a strong credit score is one of best ways to save money, says financial lifestyle expert Denise Winston, founder of Money Start Here, which produces financial seminars and DVDs. “Your credit score can determine if you get your dream job, your auto insurance rates, the cost of future loans, if a landlord will rent you an apartment, and much more,” she says.

In order to become a “first class” credit user, start by adopting the strategies of these top-tier score holders.

Credit is No Laughing Matter: Jim Dailakis
Credit Score: 760

New York City-based actor/comedian Jim Dailakis may be a clown on stage, but when it comes to his financial status, he’s straight as an arrow. The Australian-born performer owns two homes and pays his bills on time without fail.

His strategy: “I see when the due date is and then put it on my electronic calendar on my computer,” Dailakis explains. Then, he says, he makes sure he has enough to pay the total amount, to the penny, every time.

Why you should try it: “It’s very liberating not to feel the ‘wolf’ pounding at my door,” says Dailakis. “I’ve definitely acquired financial discipline.”

Lesson learned: Keeping up with your credit can be a challenge, says credit consultant Wayne Sanford of YourCreditSpecialist.com. He suggests setting up an online auto-pay. “This way, you can have the amount you need transfer directly to your creditor and not pay any extra fees.”

Extra Credit: Anna del C. Dye
Credit Score: 804

Anna del C. Dye, a new-fantasy author from Salt Lake City, UT, is proud of her long-lasting marriage as well as her financial acumen over the years.

Her strategy: “When my husband got a raise 10 years ago, we opted to add it to the principal in our mortgage rather than our monthly expenses,” says Dye. “We lived on the same income as before and paid our house faster.”

Why you should try it: “Our house is ours and so is everything in it,” says Dye. “Now we can eat out more often, help others, go to the movies more often, and travel around the world. We get to play and have fun when we are still young.”

Lesson learned: “Our culture’s lenient attitude toward debt is harmful,” says Peter Dunn, personal finance expert and author of 60 Days to Change. “If you want great credit, you must develop an urgency to become debt-free.”

Divorced from Bad Credit: Tammie Aaron-Barrada
Credit Score: 789

Tammie Aaron-Barrada’s first husband essentially ruined her credit just by having his name on her cards, and running her into debt. After they broke it off, she was left to claim bankruptcy. The entrepreneur and inventor from Ruffs Dale, PA, has since made rebuilding her credit top priority.

Her strategy: Aaron-Barrada had to made wise decisions to reestablish her credit standing. She took out 90-day same-as-credit accounts to buy new furniture that she could afford, as well as made sure she put utilities in her name and paid those bills on time.

Why you should try it: Aaron-Barrada says having great credit gives her peace of mind, should an emergency ever arise. Building back up to a high credit limit means she won’t be left high and dry ever again, and has a better credit score to show for it.

Lesson learned: “When you make someone a joint-account holder or you co-sign a loan, you become fully responsible,” warns Denise Winston. She recommends checking your potential spouse’s credit report and finding out if he or she owes back taxes.

“Your credit score has the potential to determine the quality of your life,” says Winston. “It can potentially cost you thousands, if not hundreds of thousands, of dollars over your lifetime.”

Are You a Credit Score Wannabe is provided by Experian.com

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When Jeannine Pesce, a 37-year-old mom from Manahawkin, New Jersey, decided to quit her job and go back to school to become a nurse, she was sure it was a smart move toward a more secure future. But she’s planning to buy a home in 2010 and is worried her lack of income will drag down her credit score.

“This is a common myth I think a lot of folks assume is true,” says Curtis Arnold, founder of CardRatings.com and co-author of The Complete Idiot’s Guide to Person-to-Person Lending. “Income might affect your ability to get a loan (depending on the creditor), but it legally should never affect your credit score, either positively or negatively.” When computing your credit score, credit bureaus only look at items such as your payment history and how much debt you owe; personal information like your gender, age, and location can’t legally be considered. And while residing in a famous zip code like 90210 may be fun, says Arnold, it won’t improve your credit.

These days, many of us are doing some serious head scratching when it comes to credit scores, partly because there is a lot of false information swirling around. How can you move forward with your financial life if you’re muddled with misconceptions? Read on as seven more myths are debunked, leaving you with the “real deal” credit information you need when purchasing a home or taking out an auto loan.

Myth 1: Checking your credit will lower your score.

Checking your credit report will never affect your score, says Arnold. Thanks to the Fair Credit Reporting Act, you’re entitled to one copy of your credit report a year from each of the three major credit bureaus. Arnold says you can order them as many times as you want (by paying for subsequent reports) and it still won’t adversely affect your score. If you do apply for credit by filling out an application, though, your score might be slightly pinged.

Myth 2: Shopping around for a loan will hurt your credit score.

Not anymore. In 1999, the scoring model was changed so that consumers wouldn’t be penalized for comparing rates within a 30-day window, says Heather Wagenhals, author of the Unlock Your Wealth crisis management and financial wellness series. However, if you shop for a credit card one day, a boat loan the next, and a mortgage the day after that, the underwriter may wonder whether you were denied or if the loan hasn’t hit your report yet.

Myth 3: If you don’t use your credit card account, you’ll lose your credit line.

As a credit fraud measure, your lender may stop reporting your trade line for lack of activity, says Wagenhals. “Your scoring is based in part by open and active trade lines,” she says. “Thirty percent of your score is based on timely payments. If there is no payment due, you may be missing out on a possible one-third of your credit score.” According to Wagenhals, it’s much better to charge your credit cards up to the amount you can comfortably pay off each month and rotate cards to keep them all open and active.

Myth 4: If you co-sign on a loan, your credit score is not affected.

According to Patrick Ritchie, author of The Credit Road Map, when you co-sign on a loan, you are equally liable (along with the primary borrower) to repay it. This debt will appear on your credit report and will have the same ramifications as if it were your debt exclusively. “Consider the payment ramifications,” says Ritchie. “If you have co-signed for someone and he or she is 30 days late on the payment, it will hurt both of your credit scores. In the case of co-signing on credit card, they may pay on time, but if the card is maxed out, the impact on both credit scores can be dramatic.”

Myth 5: It’s impossible (and takes forever) to dispute information on my credit file.

By law, the credit bureaus have only 30 days to complete an investigation on your credit file – all you have to do is request it, says Gregory B. Meyer, community relations manager at Meriwest Credit Union in San Jose, California. “If they cannot determine the validity or accuracy of an item or if it was determined to be out-of-date/expired, it is supposed to be removed from your credit report,” he says. When you mail your investigation request to the credit bureau, Meyer adds, you must mail copies of the request to the creditor as well.

Myth 6: After saying “I do,” your credit scores are married, too.

It’s a common misconception that credit scores are united in marriage, says Ken Lin, CEO of Credit Karma, a credit-score management service based in San Francisco. While you may share financial obligations in marriage, your credit scores will remain separate.

However, your spouse’s credit habits can affect your credit score, specifically activities like paying bills on time. “If your spouse has had credit problems in the past, make sure he or she is committed to a healthy credit future before you agree to co-signing or opening a joint credit account.”

Myth 7: Turning to a credit-counseling service will hurt your score.

“Credit counseling by itself most definitely does not hurt your credit score,” says Ken Clark, certified financial planner and author of The Complete Idiot’s Guide to Getting Out of Debt. “There is no place to report such a thing on the actual credit report, which is the basis for your credit score.”

According to Clark, this myth surfaces because of people who end up working with for-profit debt settlement agencies that deceptively market themselves as “credit counseling.” When these organizations negotiate a repayment plan or debt settlement on your behalf, says Clark, this can cause a drop in your credit score, since it is a further demonstration that you were unable to handle your use of debt wisely.

Credit-Score Urban Legends – Busted! is provided by Experian.com

When it comes to debt, financial experts have typically marked both “good” and “bad” scenarios. But in today’s touchy economy, the lines are becoming blurred.

To avoid stacks of unpaid bills, many of us are turning to cash instead of pulling out plastic for purchases. That’s a smart move according to a recent study in the Journal of Experimental Psychology: Applied (American Psychological Association), which found fresh evidence that if you’re looking to curb spending, cold hard cash is the way to go. “The more transparent the payment outflow, the greater the aversion to spending, or higher the pain of paying.”

Sarah Evans, director of communications for Elgin Community College (ECC), has made a concerted effort to stick to cash these days in order to avoid debt. “My husband and I accrued a lot of debt right after college,” says Evans. “We used credit cards to make ends meet, buy our professional wardrobe, even for groceries. It took about two-and-a-half years of dedicating the majority of our financial resources to paying it all off.” Now, Evans and her husband pay cash or debit for major purchases. “If we decide to open a credit card to save money on a purchase, we pay it off the next month.”

Get Smart: Examining the Varying Degrees of “Good” Debt

There are some purchases that have long been deemed worth going into debt for – education, for instance. “Education is the one investment no one can ever take away from you,” says Evans. “It is not market-dependent, nor will it ever decrease in value. I am confident in my conscious choice to go into good debt for higher education.” Amy Perrin, director of student financial assistance at ECC, echoes Evans’ sentiment. When she advises students and parents about the cost of college, she asks they consider the benefits of having a degree.

Education is like any other venture, says Perrin, and you should compare the upfront financial obligation to the rate of return on your investment. “My experience has been that the rate of return far outweighs the risk,” she says. “I advise students to apply for financial aid early, research scholarship opportunities, and borrow only what they need to cover costs.” Coming from a community college environment with low tuition costs, Perrin feels confident telling students higher education is a profitable and wise opportunity.

But is it also wise to go deep into dept for a pricey education – believing that borrowing for your degree is a smart choice regardless of the cost? It’s not so simple, says Robert Pagliarini, president of Pacifica Wealth Advisors, Inc. and author of the bestselling The Six-Day Financial Makeover. “Experts have said education debt is always good debt, but I completely disagree.” According to Pagliarini, it’s like saying food – any kind of food – is good. We all know that’s not true. It’s got to be the right kind of food. He feels going into debt to get a degree or to increase your skills is smart if it will translate into a better job and more money. “Do not borrow $50,000 just to get a degree that you’ll never use or that won’t move you forward. You’ll have a nice diploma, but you’ll also be plagued with debt for a long time.”

Even knowing her education-related debt was a necessity, Evans still intensely worried about her credit score when she and her husband purchased their house two years ago. “The night before we got our scores reminded me, ironically, of the anxiety the night before a college exam. Luckily, we didn’t have much to be concerned about. In my case, the credit score worry was situational (the purchase of a home). While it is not on my mind daily, my husband and I do our best to practice good financial habits.”

So What, If Anything, Is “Good Debt”?

According to Manisha Thakor, co-author of On My Own Two Feet: A Modern Girl’s Guide to Personal Finance, it’s worth going into debt for a house you can afford. For most people, this means buying a property that is roughly three to three-and-a-half times their annual household income.

Another debt-green light: A car to get you to work. If you must have one, says Thakor, the purchase price should ideally be no more than 30 percent of your annual income. Additionally, try to put 20 percent down on a loan that is no longer than five years.

Bottom line: The best kind of debt is debt you can afford. This means debt that has monthly payments sufficiently low enough that you can pay it down while meeting all your other necessary living obligations (and a few fun ones, too) with cash.

Provided by FreeCreditReport.com, a part of Experian.
See your credit report and score today

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In the past year, Chad, a 38-year-old former president of a social media communications company, has gained 30 pounds, seen his hair turned gray, and confesses that both his blood pressure and cholesterol have increased. The cause is none other than the economy. “The economic downturn hit us early last year when people stopped paying,” he says. “We had a mountain of uncollectible outstanding invoices.”

Like many Americans — eight out of 10 people, according to a recent poll by the American Psychological Association — Chad cites the economy as a significant cause of stress. He’s gone from being an affable, easygoing guy to a hardened bill-collector who rarely laughs, he says. Along with his health, his bank account has taken a major blow: he is currently $380,000 in debt and is dealing with the fallout of failed funding on a million-dollar project.

How Your Health Can Circle the Drain

It’s no surprise that debt with little revenue can send your health plummeting alongside your credit score. After all, says New York-based clinical psychologist Deborah Serani, money is more than just dollars and cents. It offers intangible feelings of security, power, independence, and freedom. “When our financial bedrock is shaken, not only do the numbers dwindle lower, but so, too, does our ability to cope with life issues,” Serani says. “Maxed out credit cards, unpaid bills, and mounting cash flow problems shake up our world.”

According to Serani, our bodies crave predictability. When we are taken by surprise or burdens or trauma creep in, it sets our neurobiology into a “Stress Response Cycle.” “Stress becomes dangerous when it interferes with your ability to live a normal life and do everyday things,” explains Serani. Chronic stress, which can lead to heart attack, high blood pressure, stroke, impaired memory and cognition, lowered immunity defenses, agitation, and depression and lethargy can wreak havoc on your emotional and physical health, she explains. “It can be lethal.”

Sick and Tired of Being Sick and Tired

John, CEO of an Internet media and marketing company, is carrying some pretty hefty weight on his shoulders, too. Worries about his financial future and the livelihood of his employees are all but dragging him down. Despite dwindling ad revenue, he’s determined to keep his company afloat. “If I fail, I fail everyone,” he says. “I do have days where I am physically sick.”

John’s lifestyle has become so unhealthy, he says, that vacations are always about getting back, and time off is spent calculating what he can accomplish upon return, a far cry from how things used to be. “I remember stretching every last second away from the job,” says John. That meant downtime whenever possible and leisurely lunch breaks. “Now, I almost don’t have time to leave to eat. I don’t want to go.”

Red Flags and Feasible Solutions

So, how can you keep your health in check during these tough times? Quoting Shakespeare, “Nothing is either good or bad, but thinking makes it so,” says Kathy Caprino, founder and president of Ellia Communications, Inc., a work-life coaching and consulting company. Caprino, a trained psychotherapist, says, “Debt will wreak havoc on your physical and emotional health if you continue to beat yourself up over it.” Her advice is “mind over money (matters),” with three sanity-saving strategies to be taken in sequence:

• Step back to gain an empowered perspective about the root cause and the behaviors, assumptions, and beliefs that got you where you are. Look at the cause of your debt or your financial situation. Get help from outside people who can see a future vision and won’t contribute to your self-blame or feed your fears.
• Let go of what is holding you back – the beliefs, actions, and patterns that are keeping you stuck and feeling small. If you’re in a mound of debt from overspending, examine the behaviors that tricked you into thinking true security was somehow outside yourself, such as your high-powered (and high-paying) job. Pinpoint what you need to let go of so you can move forward.
• Say “yes” to the compelling vision that you have about your next chapter in life. This can include emerging from debt, finding a new job, or developing more security in your current one. Accomplish your goals by taking action steps: seek out a financial consultant, mentor, or coach who can help you make a solid plan to turn your scenario around.

“Our physiology has a way of letting us know when things become too much to handle,” says Serani. When agitation, lethargy, and headaches occur frequently and are accompanied by feelings like despondency, helplessness, or anxiety, a stress response may be in its beginning stages. Says Serani, don’t skimp on the good stuff. “Remember to exercise, eat healthy, and involve yourself in social activities. And, if you find yourself tired and exhausted, give yourself the rest you need.”

Provided by FreeCreditReport.com, a part of Experian. -
See your credit report and score today