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Understanding Your Credit Score
Your credit score is a very important tool when it comes to your financial status. Your credit score can help you obtain a new car, a home loan, or other purchases that may require more money than you have on hand. Understanding your credit score can help you take control of your financial destiny.
The three digit number known as a FICO score was named after the company that developed it, Fair Isaac and Company. The typical FICO score is between 300 and 850, and the higher your score the more chance you have for being approved for loans or other high value purchases. There was a time when consumers were not able to view their FICO scores, but that has changed just within the last few years, enabling consumers to improve their credit profile.
The best score to have is any score that is 720 or above. If your score is below 720, it is definitely worth while to work on your credit score to reach that ideal score threshold. Some may wonder how their credit score is determined. Your credit score is determined by four factors. Payment history is very important. Your credit score takes in to account how you have faired with past accounts. The amount you currently owe is the second factor. If you owe near or over your maximum available credit, you will be seen as a bad credit risk. The length of your credit history is also taken into account. Having several accounts that you have paid faithfully on for several years helps your credit tremendously. The amount of new credit you have also plays a role. If you open too many new credit accounts all at once, you may be assessed as a credit risk in the future. The kinds of accounts you have is also an important factor. The mix of credit cards, retail credit lines, and other financial loans is a very important part of your overall credit profile.
You can obtain your FICO score from myfico.com. It can be purchased along with your credit report. Your FICO score is typically not free, unlike your credit report which you can obtain free once a year. You can obtain credit reports from Experian, Trans Union, and Equifax. Each of these reports will have a credit score with their report, but it will not be your true FICO score. That must be obtained separately.
Armed with your FICO score, you will be able to gauge your ability to obtain loans and credit. If you have a lower score than 720, you will be able to use this information to work on your credit. Obtaining good credit may take time and patience, but the rewards are worth it in the end. | 
