One of the biggest issues our clients bring to us - looking for help and guidance - is debt that has sometimes spiraled out of control. As artists, we have so many expenses necessary to the building of our careers, that it can be easy to turn to credit cards to handle these costs. As you begin the process of getting your financial house in order, it is critical that you start paying attention to and increasing your credit score. The fact is, your credit score really matters, and may be affecting you already in ways you don't even realize.

I am honored to have a very special contributor to this week's newsletter. Our feature article was written by Mark Erickson of MillionaireCreditCoach.com. When I started my own process of learning about money and building a solid financial foundation, Mark was my very first "Financial Coach." Of course I'd had acting coaches and athletic coaches, but I have to admit I was a bit skeptical. Well, he did a great job - taught me huge amounts, handled my fears and inspired me to keep going - for that, I'm incredibly grateful!

I'm thrilled that Mark offered to share this valuable information on improving your credit score. Read it, print it out and start putting these steps into action. I promise you won't regret it!

Until next time - to your prosperity!

Miata

P.S. If you would like to learn how to implement techniques for automatic and stress-free debt elimination, register to join us on Thursday, December 13th for a completely FREE teleseminar. Details below!

Do you know the score? Your credit score that is. Unfortunately, if you're like most Americans the answer is probably no. Only 33 percent of consumers know their scores, according to a recent survey published by the Government Accountability Office.

But that's O.K. -- for now. Because if you implement the nine simple action steps we list in this column, you will not only know your credit score, but be on your way to improved credit as well. And this could save you tens, if not hundreds of thousands of dollars over your lifetime.

Why Your Credit Score Matters You may (or maybe not) be surprised to know that from the time you got your first credit card or took out your first student loan, you've been compiling a credit history. And it's this credit history, along with your income, assets, and liabilities, that ultimately will dictate what interest rates you will pay for your mortgage, car loan, insurance premiums, and perhaps even where you live or who employs you.

That's because lenders have long used your credit history and what's now known as a credit score (or commonly called a FICO score), to determine whether to lend you money and how much interest to charge you. For example, here's how your credit score could affect your monthly payments for a $200,000 mortgage: $1,264 each month with a 750 score; $1,520 with a 650 score. That's a total penalty of $92,160 for less-than-stellar credit for a 30-year loan!

Employers can also use your credit score to determine whether or not they should hire you. Insurers are using them to determine your premiums. And some utility companies use this score to determine how much you must pay them before they will turn the power on.

Understanding Your Financial GPA When you were in high school, did anyone ever bring up the subject of credit scores (or anything financial for that matter)? Probably not. The only score that mattered was your GPA - your grade-point average. Given the importance of your credit score, isn't funny how little time our schools spend teaching us about simple things that really matter in the world.

The score is the first thing lenders will look at when you approach them for a loan. That's why the first thing you must do is know your own credit score and understand how the credit agencies develop these scores in the first place.

In 1989, a company called Fair Isaac developed today's scoring system to give lenders a shortcut for judging loan applicants' creditworthiness. The company holds onto its secret formula like the formula for Coca-Cola, but what we do know is that it involves at least 22 pieces of data about you that it gets from the three credit bureaus (Equifax, Experian, and TransUnion). It uses this data to figure your FICO Score, which will range from 350 to 850 (anything over 700 is considered good). This score is supposed to help predict whether you're likely to pay bills on time and whether you're a good or bad credit risk.

I know all this may sound pretty scary, especially when this number can have such a big impact on your financial future. But there are ways to turn your credit score into your ally and use it to save you thousands of dollars.

A Better Way to Score

1. Get your own credit report, and find out your score. Go to AnnualCreditReport.com, and you can request your credit report from each of the three credit agencies once per year free. While these reports are great for showing you all the details, they don't actually tell you your FICO score. If you're willing to spend about $45, you can go to MyFico.com and get a full package that includes all three credit reports and your FICO score.
2. Identify mistakes, and repair errors. Over twenty-five percent of credit reports have been shown to have errors serious enough to cause consumers to be turned down for a loan or job, according to a survey by the U.S. Public Interest Research Group. That's 1 in 4 people who could be affected by inaccurate credit scores! Once you run your report, make sure you double-check every detail and account to make sure it's accurate. If you find an error, it's important to make sure your identity has not been stolen. You can put a 90-day fraud alert on your file to protect yourself while you clean up any mistakes. Then follow the directions listed on your credit reports to fix any other problems you find.
3. Negotiate with debt collectors first. Dispute errors or problems directly with lenders first, but make sure to negotiate everything in writing. And be sure to get a letter from the lender or debt collector saying that they will delete problems on your credit report before you pay any bill in collection. Use this leverage to your advantage.
4. Control your spending, and reduce your debt. The lower your account balances on credit cards and loans, the better your credit rating. Attempt by any means possible to get all of your credit card balances below a 30% debt ratio to improve your overall score. You can also contact your credit cards to see if they will increase the amount they're willing to let you borrow.
5. Limit credit-card applications. Every time you apply for a new credit card, your report will be marked with a lenders' inquiry note that could have a negative impact on your score. Anytime you apply for a department store card or even a bank loan, your report will be marked. A few of these inquiries are O.K., but it's best to keep them to a minimum.
6. Don't cancel your old accounts. If you close your old accounts, you're shutting down your credit history, which could hurt your score. It's best to pay old accounts off, consolidate them when they're with the same company, and just let them rest. Just be sure to cut up old credit cards to protect yourself from identity theft.
7. Ask lenders to report your credit limit. Ask your banks and credit-card companies to list your credit limit if it's missing on any accounts on your credit report. If you don't, your score may look like those accounts are maxed out even if you haven't borrowed to the limit. This simple step could improve your score by as many as 50 points!
8. Sign up for automatic bill payment. The best way to never miss a due date again is to set up automatic bill payment. Repeatedly paying your bills late is one of the main ways you can hurt your credit score. However, you have to be careful to read your statements because many of the credit-card companies are changing their payment schedules. The key is to make sure you never fall behind.
9. Monitor your report. Remember, your credit score can be improved over time. You should begin to monitor your credit reports at least once per year and repeat these steps every time you pull your reports.

By paying attention to your credit score and implementing these simple steps, you'll be on your way to a higher financial GPA and a score that could save you thousands annually. To learn more great credit information go to www.millionairecreditcoach.com and sign up for our free newsletter.

Millionaire Credit Coach LLC is dedicated to providing their clients with the very best educational resources and tools - to educate Americans about how the credit system in the United States works.

FREE Abundance Bound Teleseminar: Understanding the Artists' Prosperity System

Thursday, December 13th from 4:00 PM to 5:15 PM Pacific

If you're an artist who is tired of always struggling financially, join us for this FREE class where you will gain an understanding of the steps that will allow you to take control of your money. Learn about Abundance Bound and the ways we will support you on your journey towards financial stability.

This class is taught via tele-seminar so you can be anywhere in the country (and, in fact, the world). All you need is a phone!

The Artists' Prosperity Boot Camp

New Boot Camps Start in February - Reserve Your Spot Now!

This is a 10-week intensive program (taught by teleseminar), where participants learn AND implement each step of the Artists' Prosperity System. Students will get financially organized, improve their money mindset, create debt plans, start developing passive income, and much more!