What is a Credit Score?

If you're like most people you understand the basics of how credit scores are developed. Paying your bills, including mortgage payments, auto loan payments, insurance payments on time help you to establish good credit. However, understanding what causes bad credit is a bit more challenging.

Your overall credit score is based on a number of factors, including how many credit accounts you have open, how long you've had credit, what types of credit you've used, the debt to available credit you have, revolving credit, and many more items. While it is not imperative that you understand exactly how each of these factors affects your credit, it is important that you understand that paying bills on time, keeping the amount of money you owe to a manageable level, and making sure that you regularly check your credit, is vital to achieving and maintaining a good credit score.