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Anyone who has checked into their credit score has probably found the rating scale to be somewhat confusing. There are a bunch of numbers, each meaning something different. Understanding how this rating works will help you to read your credit score effectively.

Companies review various data when building your credit score. Here are just a few:

- Past Payment History - Timing of Bill Payments - Outstanding Debt - Credit History

Large amounts of debt and short credit history will result in a lower credit score even if there are no problems that stand against your credit.

Recent credit applications also factor into your score. If you have made too many applications recently, this will cause you to receive a lower score. As will too much debt at high interest rates, such as high rate credit cards.

700 or higher is considered to be a good credit score. Being awarded credit at low interest rates should not be a problem if you have a score of 700 or higher.

With a score of 450 to 650 points to that your credit score needs improvement. Finding a loan or qualifying for a credit card t this score will be more difficult unless you have some type of security. Considered to be a higher risk, higher interest rates will likely be an issue as well.

Below 450 and you likely won’t qualify for a loan or credit card until you pursue some form of credit counseling to improve your score.

If your credit score needs improvement, there are a number of sources that can help. There are many credit counseling services available, many of which are free to use. They will be able to assess your financial situation and offer advice as to the best route to improving it - and your credit score along with it.