Your credit score is a number contained within your credit report. The final judgment on your credit score depends on you amount of debt and your history in repaying loans. The amount of credit you have available to you will also be taken into consideration when your credit score is determined.

Credit scores typically range between 300 and 850, with something over 600 being average. If you have ever been referred to a collection agency or defaulted on a loan, your credit score will be adversely affected. A bankruptcy will also lower your credit score dramatically.

The total amount of money you owe as compared to the amount of money you earn will have a huge impact on your credit score. Each loan you have, including your mortgage, auto loan, credit cards, and even student loans will be taken into account. If you pay late on a regular basis, your credit score will drop.

If you make all or most of your payments in a timely manner, your credit score will rise. Lenders look at your credit score as a way to determine your credit worthiness. If your score is low, you will likely have trouble in obtaining new credit.

Lenders look at your income, your debt level, the amount of credit you have available to you, and the manner in which you make your monthly payments. By paying on time, you will keep you credit score at an average or above average level. If you have had credit problems, you may want to make an effort to repair your credit and raise your credit score.

Your future and your financial stability depend to a large extent on your credit report and your credit score. Obtain a copy of your credit report each year to make sure the information is accurate and that your accounts are listed properly. Your credit score is an important part of your life and you should make an effort to maintain it.

Ken Austin is the webmaster at The Credit Resource Guide and Financial Matters

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