In his book If on a winter’s night a traveler, Italo Calvino writes:

They don’t know that I have built my financial empire on the very principle of kaleidoscopes and catoptric instruments, multiplying, as if in a play of mirrors, companies without capital, enlarging credit, making disastrous deficits vanish in the dead corners of illusory perspectives. My secret, the secret of my uninterrupted financial victories in a period that has witnessed so many crises and market crashes and bankruptcies, has always been this: that I never thought directly of money, business, profits, but only of the angles of refraction established among shining surfaces variously inclined. (p. 158)

Sounds like so many of the big companies that are going belly up these days. It’s as if they never thought of “money, business, profits” — but only of never-ending growth no matter how much debt they assumed to continue their expansion.

Debt is much like a blinding light. When you’re first given access to it, all you can see is the glint of light refracting off the shiny plastic: the ability to purchase almost anything you want with a single flick of the wrist.

Soon, that blinding light that once enamored you becomes a source of fear, as if a locomotive were bearing down on you in a long tunnel. You know you will be run over if you don’t move quickly. Escape is nearly impossible. Your breathing comes in short gasps as you sprint down the tracks.

Why did you ever let that light blind you?

And now: You close your eyes and let the darkness of logic return. It’s no time for regret. It’s time to focus, to set yourself to the hard task of restoring proper vision — and financial sanity.

Get to work, you say to yourself.

And so it goes for tens of thousands of Americans who have discovered debt is not as appealing as it first seems.

It’s love at first sight, then infatuation, and finally disillusionment. Best not to be hypnotized by the light in the first place.

Well, the original winner of From Credit Repair to Credit Millionaire never replied back. Then I got busy with Christmas, family in town, etc. and didn’t select a new winner until this week.

The random number generator picked #11, which corresponds to “Tina” on the list.

I emailed Tina on Tuesday and she has already responded with her address, so she is officially the NEW book winner. I will be mailing the book to her this week.

Stay tuned. I hope to do another book giveaway soon.

If you left a comment to win the book giveaway, thank you for participating.

Here’s what I did.

I put each submission on a separate line in Excel in the order it was received. (I actually chose to include the four recent entries on my 7 Steps to 720 post from a year ago, since that’s what triggered this new giveaway in the first place.)

You can see the chart below to see how the names lined up:

Finally, I used the random number generator at Random.org to select a number between 1 and 12 since we had 12 total entries.

The winning number was 4. Which means Larry wins the book!

I’ve sent Larry an email requesting the mailing address and will mail the book early next week. If he doesn’t reply within a week, a new winner will be chosen.

Thanks again! And look for another book giveaway soon.

In the past few days, I’ve had four new entries for my contest to win a free copy of 7 Steps to 720. The only problem: I gave the book away a year ago!

I’ve been thinking about what to do about this. I feel bad that I wasn’t clear enough in the post. It is dated 2007 at the top, but the post itself failed to include the year.

So, in the spirit of Christmas, I’m going to give away ANOTHER free book. This time I’m giving away a copy of From Credit Repair to Credit Millionaire by Donna L. Fox. This book currently sells new on Amazon for $37.00.

And I’ll personally foot the bill — postage included!

How to Enter:

Simply leave a comment below telling me why you’d like this book.

Last time I did a book giveaway, I selected the winner based on the quality of the comment. But this time I will use a random number generator to select the winner.

IMPORTANT: Deadline to enter is Wednesday, Dec. 10, 2008 at 12 midnight.

Now, whether you win the book or not, I’d like to help you out. So here are a few suggestions for raising your credit score as quickly as possible.

1. Increase your available credit on all lines of credit.

If you are interested in only paying off debt as fast as you can, then you need to focus all your energies on one balance. If, on the other hand, you want to maximize your credit score, you need to take a different approach.

Every card you have has what’s called a “utilization rate.” If you have a $10,000 limit, and your balance is $8,500, then you have an 85% utilization rate on that particular line of credit.

In general, you want your utilization rate to be no more than 30-60% on all open lines of credit to maximize your credit score. There are three approaches to achieving this.

a. Focus on paying more than the minimum payment to reduce balances across the board.

b. If you have one card with a high utilization rate (say 90%) and another one with a low utilization rate (say 15%), you may want to do a balance transfer to bring the “problem account” down into the 30-60% range.

Even though your overall debt load won’t change by doing this, it may still give your credit score a lift.

c. Another approach is to simply call up each creditor and ask for a limit increase. Should you be approved for a credit limit increase, this will automatically reduce your utilization rate on any account with a balance.

2. Keep zero-balance lines of credit OPEN.

When getting out of debt, the temptation is to close accounts after they’ve been payed off. And while this may be good for curbing spending, it is not good for maximizing your credit score.

One of the worst things you can possibly do is to close lines of credit immediately before getting approved for a home loan. It could take six months or longer for your credit score to “heal” after closing an account.

Why is this?

Because reducing the overall credit you have available to you increases your overall utilization rate.

Example: If you have $50,000 in credit and you have total balances of $25,000, you have a 50% utilization rate. If you then close an account where you had $15,000 of available credit, you now only have $35,000 in credit. What’s more, your utilization rate has just increased to 71%. This will cause your credit score to drop.

3. Keep open lines of credit ACTIVE.

If you have credit cards with zero balances, use them for small purchases every other month or so. Of course, pay off the balances whenever you use them.

This keeps your accounts active. After all, you are scored for the wise use of credit. If you’re not using your credit, that can hurt your credit score.

I hope these tips help you… and good luck!

I expected the offer of a free book would interest more than four people. But perhaps, since Rightsizing Your Life is not directly related to debt, it is of interest to fewer readers.

Nevertheless, this meant very good odds for the four people who DID take the time enter in the giveaway.

In fact, each person had a 25% chance of winning!

Anyway, I used this random number generator to pick the winner. I instructed it to pick one random integer between one and five (since there were five comments, including mine). If number two had been randomly selected (the number of my comment), I would have simply had the system select again.

But that’s not what happened. The system randomly selected number one as you can see in this image…

This means that Merlene Paynter wins the free copy of Rightsizing Your Life by Ciji Ware.

Merlene writes: “The book sounds like exactly the sort of thing I’m looking to read right now. I’m in the middle of downsizing from my house which has 2200 sq ft of living space (plus garage, 2 patios, garden shed) to an 800 sq ft apartment with no storage other than the bedroom closets.”

It sounds like this book is coming at the perfect time for Merlene. Congratulations!