If you have ever tried to borrow money, get a credit card, or buy something on credit, then someone has probably pulled your credit score. Your credit score (at its most basic) is the odds which lending America puts on your ability to pay back money they lend to you. The higher the score, the more likely you are to pay. These numbers come from information found in your credit report.

Your credit report is all of your financial history for the last seven years. The exceptions to the seven year rule includes some good credit information (like closing an account that was in good standing) and Chapter 7 bankruptcy information - both of which stay on your history for ten years.

Your three digit credit score is calculated based on a formula developed by credit report companies. They go over information connected to your credit history to determine your score. California established a law in 2000 that allows anyone applying for credit to have access to their credit score. Now federal law permits you access to information that the credit card companies used to keep secret, like how your credit score is determined.

Credit scores are not difficult to calculate or understand. The actual score is made up of a number of variables and falls somewhere between 300 and 900. The score is based 35% off of your history of payments, 30% on current debt, 15% on how long you have had credit, 10% on what kinds of credit you have access to now, and 10% on how many times your report has been asked for. After comparing those pieces of information with other similar consumers, your credit score is calculated.

Suggestions for improving your credit score:

- Keep your rotating credit to 25% of your limit.

- ALWAYS pay on time - paying early is even better, although it doesn’t affect your credit score.

- When trying to get a loan, shop around for one during a period of thirty days so that all requests made to check your credit score are considered to be one total request.

- Know your credit score. Each year, you can check your credit score for free by visiting annualcreditreport.com. Doing so will help you prevent problems from escalating until they create large problems.