Understand your credit score

In the United States, a credit score is a number lenders use to judge how reliably you repay borrowed money. Other countries use different systems, so check the rules where you live.

What usually affects a score

• Payment history: paying on time matters most.
• Amounts owed: using a small share of your available credit looks better than using most of it.
• Length of history: older accounts help.
• New applications: many applications in a short time can lower a score.
• Mix of accounts: a mix of credit types can help a little.

Simple ways to improve it

1. Pay every bill on time, and set reminders or autopay.
2. Keep card balances low compared with your limits.
3. Think before closing your oldest card.
4. Apply for new credit only when you need it.

Check your reports

In the US, you can get free credit reports from the three major bureaus through annualcreditreport.com. Look for accounts you do not recognize, and dispute mistakes with the bureau.