By Candice Choi, AP Personal Finance Writer
NEW YORK (AP) — Your past is never really behind you. Or so it seems when it comes to credit reports.
As you prepare to shape up your finances in 2010, you'll find that improving your credit score is among the more complicated tasks.
You may be bewildered by what helps or hurts your score, by how much and for how long. Regardless of whether you understand how it's calculated, the number you're tagged with can play a big hand in your financial fate.
Banks use credit scores to help decide whether to extend loans, and if so, at what price. A lower score will likely mean higher interest rates on credit cards, student loans and mortgages. In the latter scenario, the difference could amount to hundreds of dollars a month.
Generally speaking, a score below 620 is considered poor; 620-659 is fair; 660-749 is good, and 750-850 is excellent. It costs $15.95 to get your score at MyFico.com.
Here are some actions you can take, now and over time, to raise your number.
WHAT YOU CAN DO NOW
One of the fastest ways to improve your score is to pay down your balances. How much of a lift you'll get will depend on your overall credit profile. But paying off all balances could push someone in the 650-range into the 700-range, said Craig Watts, a spokesman for FICO, which formulates the most widely used credit scores.
This is because the portion of your credit line that you're using — your so-called credit utilization — is a big component of your score, accounting for about 30%.
If you buy the standard FICO score package at MyFico.com, you can access a simulator that tells just how much certain actions will lift or lower your score. For some scenarios, you can see how your score would change over one month, versus six months or two years.