To understand your credit score you need to get a better understanding of the factors that affect your credit rating. This knowledge can help you to avoid situations where your credit might be negatively affected.

• Short or non-existant credit history
• Late payments or not paying at all
• Defaulting on a loan
• Too many credit card or loan accounts opened in the last year
• Applying for too many credit or loan accounts in a short period of time
• Balances on credit cards that are at or near the maximum
• No recent credit card balances
• Too few or too many credit card accounts
• Closing credit cards that still have balances
• Closing old credit card accounts
• Not enough diversity between credit cards and loans
• Having a credit account charged off because of non-payment
• Public records show you have tax liens, judgments, or bankruptcies
• Having your home foreclosed because of late mortgage payments

TIP: Be cautious of websites that claim to offer free credit reports. A number of these sites will only give you a free report  if you buy other products or services. Other sites give you a free report and then bill you for services you have to cancel. To get the free credit report authorized by law, go to www.AnnualCreditReport.com or call (877) 322-8228.