To respond to the credit crunch, credit-card companies are making plenty of fixes on their end – slashing limits, raising rates, giving the cold shoulder to all but the least risky borrowers. So if you want to borrow at the best possible rates, you’re going to have to make your own credit fixes that stick.

John Ulzheimer, On the Money’s credit guru, says that it starts – and ends - with credit scores, especially in these post-financial crisis days.

Credit scores are the biggest thing standing between you and getting the best rate from your bank on just about anything. Whereas a 750 score used to be considered the top of the heap, it’s now just “good,” he said. To get your score up, you actually need to maintain some debt. As Ulzheimer explained on Monday’s show, keeping a small amount of debt on a card or two, and paying off the minimum each month, shows the credit agencies that you can manage debt properly. It sounds odd, right? Getting into debt to get better credit. But according to Ulzheimer, taking on a little debt is your key to a higher credit score.

If you apply for a loan and you do not get approved – or get approved with less than the terms or rate you expected – there is a law that states that the lender must give you a notice of adverse action, which is a written explanation of why you were not approved as you intended. From this notice, you can often deduce that your credit score was at least partially responsible. Ulzheimer recommends running your own credit diagnostic to determine what’s keeping your score down. Is it too much debt? Late payments? Too many inquiries? From there, take the steps necessary to get that score up. Because these days, a perfect 800 could be your ticket to the bestrates out there.

If you have questions about your credit score, how it is determined, or how you can raise it, be sure to visit our Forums, where you can ask John Ulzheimer yourself. If you haven’t registered for our online community, you can do so by clicking here. It’s free and it only takes a minute.

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