Having a good credit score is important to your financial success. It will give you the upper hand when dealing with creditors. Your score is a reflection on how likely you are to make your credit payments on time. Not only does your credit score affect your ability to get a loan, but it will also affect the interest rate you pay for your loan. It will determine where you live, what you drive, and your quality of life.

FICO scores range from 300-850. Most people score in the 600’s and 700’s. Credit scores above 700 are very good, and are a sign of good financial health. FICO scores below 600 indicate high risk to lenders and result in higher interest rates or no loan offered. When you have a low score, a creditor can increase your rate on a credit card you already have without warning.

Many factors go into your credit score. Your payment history makes up the largest part of your score (35%). How much you owe makes up another large part (30%). This also includes how much of your available credit you are using. The length of your credit history is also considered (15%). If you have recently applied for new credit, this will be factored in (10%). Having a mix of loans such as auto, lines of credit, and credit cards also affects your score (10%).
Some ways to improve your score are:

Paying your bills on time

Keep your balances low on credit cards

Pay off debt rather than moving it between credit cards

Apply for and open new credit accounts only when you need them for a true emergency

Check your credit report regularly for accuracy, fix errors immediately

If you have missed payments, get current and stay current

Having good credit will give you the peace of mind that when the opportunity arises you will be able to use that score to your advantage. You will be able to have a home that is yours. You will pay smaller deposits to utility companies. Your credit process will be quicker, preventing you from missing out on lost opportunities.