by Lynn Nadler

Your credit score, also known as your FICO score, is a very important number and one you should know.  Three quarters of all lenders use FICO scores when considering requests for loans or credit.  This score will determine your interest rate, the amount of your down payment and the kind of mortgage available to you if you buy a house.  It will even determine your ability to get a car loan, the premium on your auto or home insurance and is often even considered when you apply for a job.

FICO scores range between 300 and 850, with the average score being 675.  Ratings are as follows:

Over 750 - Excellent

720 or more - Very Good

660-720 - Acceptable

620-660 - Uncertain

Less than 620 - Risky

When determining your FICO score, the information upon which the formula is based includes: payment history, amount you currently owe lenders, the length of your credit history, the number of new credit accounts and the mix of credit accounts (mortgages, credit cards, installment loans, etc.)

Once you know your FICO score, there are ways to improve it, although this can take time.  Make sure you pay your bills on time, especially your mortgage.  Keep the amount you owe on credit cards low.  If the limit on a card is $2,000, make sure you stay well below that.  If you have a large number of credit cards, cancel ones you don't use and keep just 2 or 3.  If you do cancel, make sure you tell the company to note that the card was cancelled at the customer's request.

To find out your FICO score, there are a number of companies that will give you a report for free.  Do this and then follow these suggestions so that when you're ready to buy a house or a car or look for a job, you will be prepared.