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About 4 in 10 Americans 'have no idea' how their credit score is determined

Credit scores are used for more reasons than people tend to realize, and a high one can save you thousands of dollars over time. Still, a new survey suggests, millions of Americans don't understand how they're put together.

CompareCards by LendingTree conducted an online survey of more than 1,000 people and found that 37 percent either strongly or somewhat agreed with the statement, "I have no idea how my credit score is determined."

That said, many knew more than they assumed they did. When asked what most affects a score, around 8 in 10 correctly guessed one of the top two most important factors: bill payment and your level of debt compared to your available credit.

So lots of people do seem to understand that, if you want to increase your score, as CreditCards.com analyst Ted Rossman says, "the most important things are to pay your bills on time — every time! — and keep your debts low."

Your credit score, which is a reflection of your credit report, is also based on factors such as the length of your credit history, the types of credit you have and how often you apply for new credit.

The commonly used FICO scores range from around 300 to 850. A score below around 650 is considered problematic, while an excellent score of around 750 or above will get you the best rates. The prime range, in which you'll typically at least qualify for loans, is around 700 and up.

CompareCards also asked respondents, "Would you be willing to give a lender access to your checking or savings account information if you thought it would give you a better chance of being approved for a loan from that lender?"

Around 1 in 3 said they'd be willing. Men were more likely than women to agree. This is notable because, in October, FICO announced that it will launch a new scoring system, the UltraFICO score, that will let consumers link their checking and savings account information to their credit report.

Jim Wehmann, the executive vice president of scores at FICO, called the new system, which is slated to become available this year, "a game changer." Consumers who fall into the "problematic" range, as well as those with limited credit history, can expect their scores to jump the most as a result of the overhaul.

If giving lenders access to that much private information makes you squeamish, though, you don't need to do it. You can still build up your credit score through responsible financial behavior.

"People tend to see credit as this mysterious, unknowable beast," says Matt Schulz, the chief industry analyst at CompareCards. "The truth is, it's not."

Don't miss: 3 myths about what affects your credit score that FICO wants to clear up for you

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