Keeping a good credit score in a bad economy can help consumers not only to survive, but thrive.

Not only does good credit increase one's purchasing power, it also improves cash flow by keeping costs down, explains Craig Carnick, a certified financial planner and founder of Carnick and Company, a Colorado-based firm of personal financial advisors.

He said, for example, that many consumers don't often know that insurance companies underwrite homeowner and automobile policies based on credit scores. Furthermore, credit card companies can arbitrarily raise a borrower's interest rate based on a dip in that credit score.

"In difficult times, (a higher interest rate) is the last thing you want to have happen," said Carnick, who has 30 years of experience as a CFP.

Tips For Boosting Credit Scores

So, how does one keep a credit score from falling or boost it once it sags?

"You need to get help before the trouble starts," Carnick said.

Those who are having trouble paying bills on time should make every possible effort to stay current on payments by:

-- Contacting creditors first if help is needed
-- Being honest, always

Carnick said creditors are generally more willing to help consumers in trouble with special repayment programs and arrangements, underscoring the reality that missed payments will lower a credit score quicker than anything.

"It is critical to keep a good payment history. In the event you are unable to make the minimum payment, the best option is to communicate with the credit card company about your situation in the hopes that they will not report a late payment," said financial planner Jeremy Portnoff, of New Jersey-based Portnoff Financial LLC.

Making Sense Of Your Credit Score

The most widely known and used credit score is the one calculated by the Fair Isaac Corp., called FICO. However, all three major credit bureaus -- Equifax, Experian and TransUnion -- have credit score brands, too.

According to myfico.com, a FICO score is comprised of five criteria:

-- Payment history (35 percent of score)
-- Amounts owed (30 percent of score)
-- Length of credit history (15 percent of score)
-- New credit (10 percent of score)
-- Types of credit in use (10 percent of score)

Ranging between 300 and 850, FICO scores above 700 are generally considered to be good, with those over 800 to be exceptional.

"Sometimes, a lot of good credit history is also very helpful in building an solid FICO score," Carnick said. "To get the best rate (when borrowing), you'd better have a 700 or better."

Once a consumer understands how a FICO score works, a credit report should be pulled and reviewed thoroughly for mistakes, Carnick said.

"That's the first thing to do," he said, noting that correcting credit report errors is often the easiest way to boost a credit score quickly.

Warren Ward, a financial planner with Warren Ward Associates in Columbus, Ind., agreed.

"Most of the files we see contain errors. Although the agencies are required to respond, there appears to be no mandated timeframe in which to do so. Still, I think correcting them is the quickest way to improve a score," Ward said.

Common mistakes could include accounts not belonging to the consumer or inaccurate balances and credit limits.

To correct a credit report error, send a letter to the consumer reporting agency detailing information believed to be inaccurate, supplementing the submission with proof. The consumer reporting agency then investigates the claim. Supposing the information is deemed to be inaccurate, the creditor is obligated to contact all three major bureaus with corrected information.

However, supposing all credit report information is correct, the next step to raising a credit score is to trim accounts, closing anything unnecessary.

"In the world of credit scores, extra credit cards are a negative," Carnick said.

Managing Your Credit Cards

If the consumer insists on keeping cards, balances should be paid down. The lower the unpaid balance on a credit card, the higher the consumer's credit score.

Some advise that consumers should not close revolving credit card accounts, instead paying them down and using them infrequently as a means of showing restraint.

However, Carnick said even a paid-down credit card with a high limit looks like a risk to lenders. If the consumer doesn't need that card, the account should be closed.

"I can't envision where anybody would carry more than two cards," Carnick said.

If the consumer is successful in correcting a credit report error, paying down a balance or closing an unused, unnecessary account, it will take a minimum of 30 days for a credit score to improve, but no more than 90 days, Carnick said.

However, the keys to making that score change for the better don't involve rocket science.

"This will all help your score, and you haven't even done anything magical," Carnick said.