Your credit score is the three digit number that is used by lenders to determine how much of a risk they would be taking to lend you money or give you credit. It is based on the information that is in your credit report, and then compared to the scores of millions of other consumers. The score is figured out by running a mathematical formula. Your credit score is important because it affects the amount of interest you will pay on credit cards, loans, insurance and mortgages. A low credit score can cost you a job or stop you from renting the house or apartment you want, keep you from getting insurance, and can even prevent you from getting a cell phone!

Credit scores can range from 300 to 850. Most people have scores that range between 600 and 800.

A score of 720 or higher is seen as favorable by lenders, and you should have no trouble getting credit, a loan, auto insurance, or a mortgage that will have quite attractive interest rates.

A score of below 600 is frowned upon by lenders, and will cause you to pay high interest rates on any credit account you have. If your credit score is too much below 600, you will have a hard time getting approved for any credit at all.

Once a year if your credit is good, and whenever you are planning to make a major purchase like a car or a home, if you were denied a loan or credit card, if you were denied a job, you suspect identity theft, or you have any plans for credit repair.

If by chance you applied for five credit cards all on the same day, your credit score would go down for a short time simply because too many inquiries will lower the score about a point per inquiry. If you don't have a lot of credit, or a short credit history, an inquiry will have more of an effect on your credit score. Checking your own credit report does not affect the score. This is known as a "soft pull". Inquiries from companies where you apply for credit are known as a "hard pull".

You can receive a free credit score and credit report from each of the three major credit reporting bureaus once each year, or any time you are turned down for credit, a loan, insurance, or a job, or if you receive public assistance.

The three bureaus are:

Equifax Customer Information Service Center

P.O. Box 740241

Atlanta,GA

30374866-322-3162

https://www.equifax.com/

TransUnion Corporation

P.O. Box 1000

Chester, PA 19022

800-916-8800

http://www.transunion.com/

Experian National Consumer Assistance Center

P.O. Box 2104

Allen, TX 75013

http://www.experian.com/

• Indentifying Information such as your name and address, date of birth, Social Security number, and where you work are used to identify you from the millions of other people who have a credit record.

• A listing of all your credit accounts. Each separate account reports its type (auto loan, mortgage, credit card etc), when the account was opened, what your credit limit or amount of loan is, the amount of your account balance, and your payment history.

• Any inquiries, which are listings of who asked for and received a copy of your credit report for the last two years. This could be you, your employer, your landlord, or a lender. They remain on the report for 2 years.

• Any information that is a matter of public record, such as liens, judgments, overdue child support, lawsuits, attachment of your wages, bankruptcies, and foreclosures. Also, any information that collection agencies may have on you for debts you have not paid.

• Late payments or charge-offs on your accounts that are not correct.

• Any information that is not yours or your spouse's, such as names and addresses, Social Security numbers, or birth dates.

• Any negative information that is dated more than 7 years ago, or more than 10 years ago if it is a bankruptcy. This is old, out of date information which should be removed from your report.

by Julie-Ann Amos, professional writer, and owner of international writing agency www.ExquisiteWriting.com

Why not create your own HubPages? It's fun and you can make revenue from Adsense and other revenue streams on your pages. JOIN HUBPAGES NOW - SIMPLY CLICK HERE...

This work is licenced under the Creative Commons Attribution-Non-Commercial-No Derivative Works 3.0 Unported License. To view a copy of this licence, visit http://creativecommons.org/licenses/by-nc-nd/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California 94105, USA.