…In general, scores above 700 garner lower interest rates and those below 600 result in higher interest rates and greater chances of being denied. There are three companies which create a credit report for you: Equifax, TransUnion and Experian. While each credit report will vary slightly, there are a few basic factors that are considered when determining your credit score: late or missed loan, utility, rent and credit card payments; collection or charged-off accounts; number of recent inquiries; length of credit history; types of credit accounts open; debt to credit line ratio; bankruptcies.

In order to get an accurate picture of what prospective lenders are seeing, you'll want to get a credit report from each credit reporting bureau. Annualcreditreport.com (the Federal Trade Commissions's free credit report service, not to be confused with other services which charge a fee) allows you to pull a free credit report once every 12 months. Also, you are also entitled to see your credit report for free if you have recently been turned down for a loan. If you find a delinquent account or an inaccurate item, quickly pay it off and contact both the bureau that gave the report and the institution that submitted the item. Keep records of your correspondence and get proof that the matter has been addressed in writing. If necessary, have the institution call the bureau (or vice-versa) in order to confirm that the item has been removed. Many items can be removed from your credit report with a bit of diligence. Others, such as bankruptcies, will take 7 years to disappear from your credit report. Keeping your credit score high requires the cultivation of healthy, disciplined habits.

Make sure you:pay your bills on time; keep balances low on credit cards; avoid opening unneeded accounts; and use your credit, but use it wisely