According to Bankrate.com, thirty-five percent of consumers have never checked their credit reports. That number is astounding, considering credit scores are used when applying for credit cards, financing, renting a home, opening utilities, getting a cellphone and more.

While those activities don’t happen every day, our credit scores are important and can be difficult to fix once they get out of hand. Not to worry though, I’m here to help you learn more about your credit score and how to make sure it’s in great shape for your next credit check.

Who Determines Your Credit Score and How?

In the United States, there are three national credit bureaus, including Equifax, Experian and TransUnion who all track your credit score. Your credit score is determined by a number of factors, including your payment history, amounts owed, length of credit history, new credit and types of credit. The score may vary at the different bureaus based on which information each bureau has available to them.

What is “good” Credit?

Credit.com breaks down credit scores as follows:

• Excellent Credit: 781 – 850
• Good Credit: 661-780
• Fair Credit: 601-660
• Poor Credit: 501-600
• Bad Credit: below 500

While this is an average break down on how credit scores rate, each lender may have different scales that they follow when determining credit approval or interest rates. And, there are a number of different credit score agencies that lenders may use to find your credit score, and each agency may vary.

It’s important to know what your credit score is so you can make any necessary fixes or, so you can see if there are any errors – the Federal Trade Commission found that one in five people had an error in their credit report! Want to get an idea of what your score is? You’re entitled to check your credit score for free, once per year. You can visit any of the main credit bureaus online to get your score.

Achieving a Healthy Credit Score

Now that you've checked your credit score, maybe for the first time ever (whoops!), you may be stoked to learn that you have an excellent score – go you! Or, you might see that your credit falls in the fair or poor category. Did you know the National Foundation for Credit Counseling found that more people would be embarrassed to admit their credit scores (30%) than their weight (12%)?

Not to worry, all is not lost. Here are a few tips on how to achieve (and maintain) a healthy credit score.

Set up Payment Reminders

This is an easy one, but sometimes life gets busy and we forget to make our credit card and utility payments on time. Set up payment reminders on your phone or on your computer so that you don’t miss these important dates. Or, set recurring and automatic payments through your bank.

Reduce Your Debt

Your debt to income ratio is important in determining your credit score, so the best thing you can do is start paying off your debts. Make it a goal to tackle your high interest balances first. You might also want to pay off your lower balances first so you feel like you’re making progress and then you can apply that payment to your next lowest balance to accelerate its payoff. Using this “roll over” approach gives you have greater control over your outstanding debts.

Don’t Overuse Your Credit Cards

It’s important to use your credit cards occasionally to build credit and show that you’re able to make payments on time, but make sure you don’t overuse your credit cards. The rule of thumb is to use no more than 30 percent of your available credit, preferably even less than that.

Don’t Open Too Many New Accounts at Once

If you’ve spent a lot on your credit card, you might think it is a good idea to open a few new credit lines so you have more available credit. Or maybe you want to take advantage of a “90-days same as cash” deal on a large purchase. Think again – each time a creditor has to do a “hard inquiry” into your record score, it can cause that number to go down just a little bit.

The bottom line is the first step to a healthy credit score is awareness, so take the time to see what yours is and what you can do to improve it or keep it at an excellent level.

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