A credit score plays a big role in your daily life. It can determine the interest rate a consumer is going to pay for credit cards, car loans and mortgages — or whether they will get a loan at all.
The three-digit number is designed to predict risk — specifically, the likelihood that you will become seriously delinquent on your credit obligations or default.
While there are many credit scoring models, one dominates the market — the FICO credit score.
A FICO score is comprised of five major factors, although some are weighted more heavily than others, such as payment history and debt owed. Here's the breakdown:
With that, there are a few simple things you can do to get your finances on track, according to Rod Griffin, director of public education for Experian. Here are his six ways to better manage your credit and improve your score: