7 Steps to Better Credit for the 40% Who Don't Understand Their Score

NEW YORK (TheStreet) -- Millions of Americans may know who won American Idol or are aware geckos and pigs to sell car insurance, but ask them if they know their own credit score and you'll get a blank look.

A 2013 survey from the Consumer Federation of America says 40% of U.S. adults don't know credit card issuers and mortgage lenders base credit decision on consumer credit scores.

Another 40% believe wrongly that age and marriage status are qualifiers for credit approval, the CFA reports.

Not recognizing the facts can lead to declining scores, more rejections for credit and higher interest rates on credit approvals they do get.

Fortunately, getting up to speed on your credit health isn't that difficult -- and Jeanne Kelly, financial author, speaker and money management coach says this is the best time to clean up your credit and get back on the road to financial wellness. Her plan:

Get your free credit report. Go to annualcreditreport.com and review it thoroughly. Redline dubious or mistaken portions of the report, then make sure they're correct.

Go back to Jan. 1. Now is a good time to re-examine your New Year's financial resolutions. If you didn't have any, make them now. Kelly says having a plan is the key ingredient in saving money and paying down debt -- two things that can significantly raise your credit score.

Have a debt repayment plan. You need a plan to pay down debt as soon as possible. "Address the debt problem sooner rather than later," Kelly says. Just getting going and noticing how you are melting away your debt problems will spur you to get more aggressive about debt.

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