Your credit score contains so many intricacies. It can be hard sometimes to keep track of everything and to understand how each of your accounts affects your credit score. Use this as your personal credit score guide. It will help you understand and track your credit report better.

First and foremost, you need to understand what a credit score is. A credit score is simply a number that is generated based on your credit history. This number is the fastest way lenders can decide if they want to lend to you or not. It is an easy way to determine how much of a risk you are. Make sure you also understand the credit score range. Credit scores can range from 300-850. The higher your credit score, the better your credit is. Any score of 720 or higher is considered excellent. Anything under 620 is viewed as poor credit. It is important to understand these ranges in order to keep yourself from credit score danger. Stay away from lower numbers so you can have excellent credit for the rest of your life.

The most common scoring method for calculating credit scores is the Fair Isaac and Company system, also known as the FICO. Understand that the Fair Isaac and Company is an independent company. However, all three credit bureaus worked closely with FICO to develop its scoring system. It has been in use since the early 1980s. Each bureau has its own version of the FICO system. Equifax uses the Beacon system. TransUnion uses the Empirica system. Experian uses the Experian/Fair Isaac system. With each bureau using its own system, each credit bureau will produce a different score for any given credit report. There is often a credit score disparity from bureau to bureau and as a result, many lenders will choose the middle score of the three bureaus, not an average or the highest.

Now that you understand what a credit score is, here is how your credit score is broken down.

35 Percent of your score is determined from your past payment history. This is because lenders want to see how responsible you are at paying your bills on time. Several things can bring this score down: how many bills you have paid late, how many collection accounts you have had, how many bankruptcies you have filed for, etc.

30 Percent of your score is based on the amount of outstanding debt you have. The FICO looks at how much you owe on your car or home loan, how many credit cards are maxed out, etc. The key here is to have very few accounts at their limit. The more accounts you have that are at their limit, the lower your score will be.

15 Percent of the score looks at the time length of your credit history. The shorter amount of time, the lower your score will be. You score will be higher if you have had established credit for an extended period of time.

10 Percent uses the number of inquiries. Why does it take this into consideration? Your score will be lower if you have had several inquiries on your credit report in a short period of time. This looks like you are taking on too much debt. It also indicates financial trouble. Try to keep your inquiries low.

10 Percent of your score considers the types of credit accounts you have. You want to have a variety of accounts on your credit report. If you have 10 credit cards (revolving accounts) and no mortgage or auto loan, your score will be lower. Again, lenders want to see a variety of accounts. This will indicate stability to them.

It is very important to understand all of the aspects of your credit score. You need to be familiar with the FICO scoring system in order to keep your score as high as possible. Take responsibility for your score and make sure you working getting and keeping it as high as possible.