Credit Score: The Basics

Last Updated Feb 3, 2010 2:39 PM EST

How to maximize your credit score

Lenders these days are exceptionally cautious about extending consumers credit such as mortgages, car loans, and even credit cards. The difficult environment for borrowers makes a good credit score more important than ever. To raise your score, you have to understand what goes into that essential three-figure number.

The score, which typically ranges between 300 and 800, is calculated by credit agencies, which examine factors that are good predictors of creditworthiness, as indicated by their records. The single most important is your payment history: Do you have a long record of making debt payments when they're due? Other key inputs include the amount you have borrowed, compared to amount you could, if you wanted, and the length of time you've owned any particular credit account. The higher your score, the more likely you'll qualify for a loan at favorable interest rates. The lower your score, the more expensive your loan is likely to be — if you qualify at all.

The links below provide information you can use to understand and improve your credit score.

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