12 Comments   
With the debt you racked up over the holidays now staring you in the face, there's even more bad news from the finance gods: Your previously "good" credit score might not cut it anymore.

Before last year, a score of 700 was decent according to most credit experts. So while more than half of Americans have credit scores above 700, the benchmark has jumped to 740. What's more troubling is that even a person with a 720 will probably pay higher rates than the person with a 740. Here's the lowdown.

Why Did This Happen?
Giving credit to less-than-eligible borrowers caught up with mortgage-finance firms last year, scaring lenders into getting stricter with applicants.

"Yes, a few years ago, anyone with a 720 to 750 could expect to qualify for the best terms on any unsecured loan they applied for," says Todd Christensen, director of education for National Financial Education Center at Debt Reduction Services in Boise, Idaho. "Now, it's probably in the 750 to 770 range." Thanks, Fannie and Freddie.

Get Your Credit Report AND Your Score
The National Foundation for Credit Counseling's financial literacy survey found that 47 percent of consumers between 21 and 32 years old gave themselves a C, D or F for personal finance savvy. Nearly 64 percent of the same group also said they've never seen their credit report. (Seriously, people?)

So, first, go get a copy of your credit score (we'll tell you how below). Gail Cunningham, vice president of public relations for the foundation, says to keep in mind the score's breakdown: payment history (35 percent); amounts owed (30 percent); length of credit (15 percent); new credit (10 percent) and type of credit (10 percent).

We asked Cunningham how to improve our ranking. She recommends a "series of small, short steps taken over time." Here are some good starting points:

-Set up automatic bill pay so you never make a late payment.
-Avoid store cards unless the line of credit is much higher than the amount of your purchase.
-Don't close old accounts, pay them down. The longer you've had a card, the better it is for your credit history.
-Pay down the card with the most debt as quickly as possible while paying the minimum on other cards.
-Get your score from one of the three credit bureaus every four months instead of pulling them all at once. You'll get a more accurate reflection of your score.

But it's about more than your score. Looking over your actual credit report will help you catch mistakes in your credit history (like if your information gets mixed up with a relative's or with someone who has the same name).

Get free annual credit reports from AnnualCreditReport.com. Another tip? If you've recently applied for an apartment, your landlord might have pulled your credit report -- just ask for a copy.

Want to know more? Check out this story about other women who upped their credit scores and got themselves out of debt.

Tell Us: How financially savvy are you? Give yourself a grade in the comments.