Fair Isaac Corp (FICO) is the most commonly used credit score. The score ranges from 300 to 850. People with credit scores about 750 are considered to have good credit, while people with a score below 620 are considered in the high risk group.

Not only can a credit score affect whether or not you get approved for credit, but at what interest rate cost.

The three major credit report bureaus give their information to FICO, which looks at five categories to calculate your credit report score:

Payment History: Accounting for 35% of your total credit score, your payment history is the most crucial factor. This area tells creditors and lenders how reliable you are in re-paying debt, and includes both revolving credit (i.e. credit cards) and installment loans (i.e. mortgages, student loans).

Debt Amounts: Accounting for 30% of your credit score, this category looks at your total, unpaid debt, with revolving credit carrying the most weight. Your total amount of debt should not exceed 30% of your credit limits.

Credit History Length: Accounting for 15% of your credit score, this category looks at how long each credit account has been open, and when the last action was taken.

New Credit and Credit Mix: Accounting for 10% each of your credit score, this category looks at new credit accounts added to your credit report. Be careful not to open too many accounts at once, and only get additional credit when you absolutely need it.

You should check your credit report score at least once a year, and legislation offers you one free credit report copy per year.

Credit Federal also offers a free credit check so you can instantly get a calculated glimpse of your credit rating.