A Credit Score is a numerical representation of your credit worthiness.

A good credit score is what each of us aspires to. After all, a credit score is one of the important determining factors when it comes to borrowing money – and getting a low rate when you do. But trying to pin down a specific number that means your credit score is “good” can be tricky. After all, there are lots of different credit scores that lenders use when trying to decide whether to grant you a loan and one lender’s “good” score may fall into another lender’s “fair” credit category. (Not to mention, you may score differently from model to model.) Luckily, there are broad rules of thumb that can help someone figure out whether their credit is good or not. Let’s break it down.

How Do I Rate? Most credit scores – including the FICO score and Vantage Score 3.0 operate within the range of 300 to 850. Within that range, there are different categories, from bad to excellent. They generally look like this:

Credit Score Ranges:
EXCELLENT: 800-850
VERY GOOD: 740-799
GOOD: 670-739
FAIR:580-669
POOR: 300-579

Credit Reporting Agencies:
*Equifax
*Experian
*TransUnion

The credit reporting agencies (CRAs), also known as credit bureaus, gather all of your credit information, so it’s wise to be well-informed about their function. Your credit history, scores and reports are extremely important, so we want to make sure you have the facts straight. Lenders go to the three main credit bureaus,  Experian, TransUnion and Equifax — when looking to pull and review your credit reports. There are numerous CRAs in the business besides these three agencies. Still, there’s a lot of confusion when it comes to what the major credit bureaus actually do. What kind of information do they collect? Where does that information end up? Do they create credit scores or credit reports? And what’s the difference? Let’s break it down.

What Do the Major Credit Reporting Agencies Do?
The short answer is that these agencies compile details about your credit history so potential lenders can see what type of risk they’d be taking in giving you a new credit card or loan.

The major credit bureaus are all for-profit companies and are not owned by the government. They have reporting relationships with banks, credit card issuers, lenders and other financial organizations and compile your credit history into credit reports. To contact any bureau directly, on the phone for example, check their individual websites for more information.

What Kind of Information Do Credit Bureaus Collect?
Credit reports include information about your existing credit accounts as well your payment history from a variety of financial institutions including credit card companies, banks, mortgage companies and other lenders you may have worked with in the past.

Other businesses, like telephone and utility companies, may also report information to credit bureaus, but non-lending organizations like these tend to only report delinquent payments and other negative information (an account sent to collections, for example).

The major credit reporting agencies collect a lot of information, but there are five key factors listed on your credit reports that are used to determine your creditworthiness when you need a loan or additional line of credit. These factors are: Your payment history, the types of accounts in your credit file, your amount of debt, how long you’ve had credit and the number of hard inquiries on your credit file.

What Is Done with This Information?
Once the major credit reporting agencies have collected all the aforementioned information, compiled your credit history, and generated a credit report, they sell that information back to the lenders, so they, in turn, can determine your creditworthiness. Based on your credit report, lenders can decide whether to lend to you money. If they decide you’re someone they want to do business with, the information supplied by the credit bureaus will be used to help determine what your interest rate will be.

How Long Do Credit Bureaus Keep My Information?
Personal information, like your name, address, etc., as well as positive financial information, like a strong payment history, can remain on your credit reports indefinitely.

The credit bureaus compile more troubling information as well to give insight into how risky of a potential borrower you are. Most of these details can remain on your credit reports for seven years, but the timeline can vary depending on the item.

Here’s a breakdown of how long the some of the negative information collected by the credit bureaus will likely stay on your credit reports.

Bankruptcy: Ten years from the date of filing for Chapter 7 filings, seven years for Chapter 13 filings and seven years for each record marked as “Included in BK”
Charge-Offs (when a creditor or lender writes off the balance of a delinquent debt, no longer expecting it to be repaid): Seven years
Closed Accounts: Seven years if the account was paid late, no expiration date if the account was always paid on time
Collection Accounts: Seven years from the last overdue payment on the original account
Inquiries: Two years
Late Payments: Seven years from the date of the past due payment
Judgments: Seven years from the filing date if paid; longer if unpaid
Tax Liens: Fifteen or more years if left unpaid, seven years from the date the lien is paid

Factors That Impact Your Credit Score:
-Payment History(35%)
-Credit Utilization(30%)
-Length Of Credit History(15%)
-New Credit(10%)
-Credit Mix(10%)

So, to build a good credit score, you’ll need make all of your loan payments on time, keep the amount of debt you owe below at least 30% and ideally 10% of your total credit limit(s), maintain credit accounts for the long haul, add a mix of accounts (installment loans versus revolving loans, for instance) over time and manage how often you apply for new credit in a short timeframe.

Credit report mistakes can lead to disqualification for mortgages and car loans, as well as increased insurance premiums and interest rates.

Once you have your credit reports in hand, here’s a quick checklist of questions to ask yourself to help you spot potential errors:

Is all of your personal information accurate? (That can include your Social Security number, birth date, full name and address.)
Are all of your credit accounts being reported?
Are there any late or missed payments listed that you remember making on time?
Are there any accounts or applications for credit you don’t recognize?
Are there any items from decades ago still appearing on your reportt