It seems as though there is a lot of talk about credit scores and their importance these days especially in relation to getting cars on credit, but very few people are truly aware of what it means to have a good versus a bad credit score. If you are wanting to become better informed as to what your score is and, more important, what it means, then it could benefit you to start by requesting a copy of your free annual credit report from any of the three major Federal bureaus.

Once you receive the copy of your credit report in the mail, you should look on one of the first pages to find the three-digit number of your credit score. This number can range anywhere from under 500 to above 720. From there, you should also flip through the remaining detailed pages of your credit report to ensure that everything is accurate; be especially careful to check all of your accounts listed to ensure that none of these have been opened without your knowledge.

What Does the Score Mean?

Of course, that number that reflects your credit score does not do you much good if you are not aware of what it actually means. These numbers, after all, play a role in your financial future. For example, if you try to apply for a car loan, a bank may require a credit check in order to find out your credit score and determine your worthiness for a loan. Furthermore, your score can affect your interest rate.

In general, a score between 620 to 679 is considered to be average. Anything under 620 is viewed as poor and can lead to difficulty when it comes to getting a loan. Scores between 680 and 720 are considered to be good credit scores, while anything above that is seen as excellent.

Improve Your Score

If you are unhappy with your credit score, now is as good a time as ever to explore ways of improving it. You can do this by using your credit cards wisely, cutting back on spending, and making timely payments on your debts owed.