Your credit score, sometimes called FICO, is actually three different numbers that are set but each of the three different credit agencies, Experian, Equifax and Transunion.  FICO develops your score for each different agency based on the information available to that agency at the time of inquiry.  Your credit score is widely used as the basis for home or car loans and many other checks into your financial background.  Needless to say, your credit score is extremely important to your financial dealings.

The first thing that a consumer needs to do is get your credit score so you know where you stand.  Beyond just getting your credit score, you want to monitor your credit score and credit report.  You can get your credit report free, once a year at AnnualCreditReport.com but that is only part of the solution, in order to monitor your credit report for score changes, inquiries, negative reports or any other changes that may affect your actual credit score.  Monitoring your credit report is an extremely effective way to detect identity theft as you can be notified immediately of inquiries into your report.  Inquiries occur when you try to get a credit card or loan.

When someone is lending you money for whatever reason, they want to know your history of paying bills on time and for an extended period of time.  Basically, they want to know that you are a responsible person and your credit report will show them that.  Missing payments or making payments late is a red flag for lenders.  You may say that you have made 30 payments on time and they lender is looking at the one you were late for.  Setup automated payments when possible.  This takes the lost mail or forgetfulness out of the picture and long term history of on time payments helps your credit score greatly.

StarReviews Top 3 Credit Report Websites

1) Credit.com

2) FreeCreditReport.com

3) myFICO

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The actual calculation of your credit score is unknown to anyone outside of the credit reporting agencies but there are a few components that are integral parts of that calculation.

1. On time bill payment – one of the most important components of your credit score
2. Level of outstanding debt – too much debt, even if paid on time can have a negative impact on your credit score.
3. Length of your credit history – a long history  of good credit is a very important component and a short history can be offset but your timeliness of payments.
4. Amount of available credit - Too much available credit can be a negative to your credit score
5. Different types of credit – a good mix of credit types is a positive, including credit, auto and home loans.  If course too many loans, is a negative.

Keeping your credit score as high as possible is important.  Paying your bills on time and not overextending yourself is the best bet in keeping your credit score high.