Your credit score is a number used by lenders to measure your creditworthiness. This score is also known as the FICO score, having been developed by the Fair Isaac Corporation. According to SmartMoney.com, a good credit score is 760 points or greater. However, this definition varies among lenders--many consider anything above 700 to be fine.
Possible Range
A person's FICO score can range anywhere from 300 to 850, with the higher number being the best possible. Very few people ever reach either extreme, with the vast majority residing somewhere near the middle.
Median Score
As of January 2010, the median FICO score was 720. The median is the midmost score, if you were to line all scores in a sequential row and begin counting from both ends. This means that half of borrowers had a score higher than 720, and half had a lower score.
Your Score
You can obtain your score for free, once a year, from AnnualCreditReport.com. The site works together with Equifax, Experian and TransUnion to provide you with a complete credit report, allowing you to see all your debts and credit sources.
Adding Points
You can increase your score by using credit regularly, but maintaining as low a balance as possible. Having large quantities of outstanding debt harms your rating. Having a well-maintained major credit card, such as MasterCard or American Express, will help you get a higher score.
Scams
Avoid websites that offer to increase your credit score for you. Many of these are scams, and they'll both overcharge you and resort to illegal methods that will ultimately lower your score even further. The best way to increase your score is to do it on your own, using credit and paying off debt.
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