Secrets to Credit Score Success

How to keep track of your score, get it as high as possible—and keep it that way

If you think your credit history determines only the interest rate you get on home mortgages, car loans, and credit cards, you’d be wrong, but you certainly wouldn’t be alone.

In a recent U.S. News & World Report survey, less than half of the 1,497 respondents knew that in many states poor credit could lead to higher home and auto insurance rates or being denied an apartment (CR opposes the use of credit reports for these purposes).

The consequences go even further: Employers in many areas can use credit reports to vet job candidates, and having a low credit score could mean paying $4,000 more for a typical car loan or $200,000 more for credit over the course of a lifetime than someone with a high credit score.

There are several types of credit scores, but the FICO score is one of the most widely used by lenders, which makes it a good barometer of your overall creditworthiness.

According to the Fair Isaac Corporation, which creates more than a dozen versions of the score for various types of lenders, all of them are based on assorted forms of credit data (such as payment history and amounts owed) provided by the three major credit bureaus—Experian, TransUnion, and Equifax. Each form of credit data is given a different weight (see “The 5 Keys to Your Credit Score,” below).