Have you ever wondered what makes up your credit score?  Credit scores range from 300 to 850 and are a key to obtaining a loan. If you need a loan, you need good credit.  A high score is a door to lower interest rates, as you will pose less risk.   Experian, Trans Union and Equifax use many factors to calculate your score:

1.  Length of Credit History:  A longer history is better.   Agencies will be looking at the time that's passed since accounts were opened and the time passed since there was account activity.

2.  Payment history:  Do you make your payments on time?  Have you missed payments?  If so, your credit score will drop.  If you pay faithfully, your credit score will improve.

3.  Percent of Credit Used:  Add the limits of all your credit accounts.  Then add how much of that credit is being used.  The less credit used, the better.  Fifty-percent use is very high.   If you are carrying a large amount of debt, a mortgage lender may see you as at risk for default..

4.  New Credit: Have you recently opened several new accounts? This can be a red flag to lenders.  They'll wonder if you're on a spending spree and will wonder what other credit you'll be opening.  Open new credit slowly.

5.  Types of credit:  According to some experts, it is good to have more than one type of credit open.   You may have some credit cards, a mortgage, and installment loans.

6.  Settlements:  Did you default on a loan?  Have you filed for bankruptcy or foreclosure? Did you reach a settlement with a credit card company?  These factors will lower your score dramatically, as they show you are a risky borrower.

7.  Errors:  Mistakes on your report can cost you.  Check your credit often to ensure accuracy.  Dispute errors.  

Your credit score changes over time.   It will rise if you make your payments on time. Your score reflects your credit history and the power to change it is in your hands.