Have you ever been denied credit becuase your "credit score" or "credit rating" was too low? Like many consumers, you may be left confused and concerned by such a statement. You understand what a credit is, and you know about credit reports, but what in the world is a credit score? How is your score calculated, and if it's too low, what can you do to make it higher? Let us explain.

Creditors use a system called credit scoring or credit rating to make it easier to determine your creditworthiness. Creditors use complex statsitical programs to compare the information provided in your credit application and credit report to profiles of similar consumers. These scoring systems assign points for factors help determine your creditworthiness, or the likelihood that you will repay a loan.

Different companies may use different credit scoring systems, but common factors they may consider include: your past payment history, the total amount of debt you owe, your total current available credit, the "maturity" or length of your credit history, the types of credit in use, and the number of recent credit inquiries on your file.

Your best bet for building a solid credit score, or improving a less-than-perfect score is simple - pay your bills on time, pay off any outstanding balances, and don't acquire any new debt. Improving your credit score takes some time, but it will be well worth your effort, so be patient.