BOSTON (CBS) – Knowing your credit scores is important. Credit scores are a quick and easy method for a creditor to judge you as a potential customer. It wasn’t too long ago that creditors kept everything about credit scores a secret.

Credit scores are not free, but when you are getting your free annual credit report Experian will offer you a deal that’s not too expensive, $14.95. They will be offering you the Vantagescore. This is a score developed by the 3 major agencies, Experian, TransUnion and Equifax.

They use a grading system as well as numerical. When I did mine I got a B. So I called and wanted to know why it wasn’t an A? I pay off my credit card each month. That was the problem. It was not considered revolving credit. Who knew?

MyFico, a division of Fair Isaac the company that created the original credit score, also will sell you copies of your credit scores for $19.95 each and they have good information on their website on how to improve your score. There my credit scores are in the 800 range, worthy of an A.

Credit scores are important for a lender looks at the score and will determine by that score what interest rate you will be charged for your mortgage or credit card. If your score is below 700 it may be difficult to qualify for a new credit card.

Insurance companies look at the score and determine if you are a good risk or if they should charge you higher rates. A landlord will look at the score to see if you pay your bills on time.

The higher your score the lower your interest rate will be. According to MyFico, the difference between a good score and a poor one for a $300,000, 30-year fixed-rate mortgage is $298 a month or $3,576 a year, and if you stay in that house for 30 years you will have saved $107,280 over the life of the mortgage.

Your credit score uses a very complicated formula to come up with a simple number that creditors can use.

So how do you improve your credit score? The best and easiest way to increase your score is to make payments in a timely manner and not max out your credit cards. These two factors comprise 65% of your score! Longevity is also a big plus on your credit score as well. It’s worth about 15% of your total score

The higher your FICO® credit score, the lower your payments! Interest rates accurate as of April 13, 2011

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Check with for more tips on improving your score.




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