Your credit score can affect your life in many ways. It follows you around – influencing where you live, how much you can buy, and even what car you drive. It makes sense to keep your score as high as possible and work to improve it when you can.
Some facts up front
Your credit score is not the same as your credit report.
A credit report contains detailed information of an individual's credit history. It shows loans, late payments, bankruptcies and any recent inquiries. It is prepared by credit agencies to determine creditworthiness. Think of it as a school report card with all your classes shown. The info on the report will influence your credit score.
A credit score is calculated through a complex formula based on different factors that determine the actual number. You have more than one score as different credit agencies and financial institutions use different formulas. Also, your score can change monthly depending on the activities during the month. For the most part, your credit score is most influenced by how you pay your debts and how much debt you owe. Think of it as your GPA from all the “grades” on your credit report.
Improving your score