All the information that is stored in your credit report is summed up by what is called your credit score, which represents your credit rating. Credit scores fall into a range of between 0 and 1000, and it is these cedit scores that lenders use to make on-the-spot credit decisions quickly, based on the number that represents your credit score, which is how lenders will conclude the potential risk.

Bankruptcies and charge-offs, late payments, the amount of used credit compared to available credit are just some of the factors that will be used to determine a borrower's credit score. The length of time that credit has been held will also have a bearing on what your score will be.

Typically consumers with scores below 600 are charged relatively high loan rates, while consumers with scores above 700 are generally charged relatively low rates, while those with scores above 760 will normally be charged the lowest rates. Credit scores below 500 are considered to be the worst.

Credit scores are extensively used, and if you have a mortgage, a credit card or auto insurance, car loan, or any kind of loan at all, then the rate that you received was directly related to your credit score.

If you have differing credit scores from different credit reporting agencies, then all this means is that the information held by the different agencies about you is almost certainly different. Knowing this you can understand that your credit score will change when changes are made to your credit report held by these agencies

Your chances of being approved for credit by any lender, whether the lender is a bank,,credit card company or any other lender, are increased significantly if you have a high credit score, as the risk to the lender of incurring a loss is lower than the risk would be if you had a low credit score.

Some-thing to be aware of is that you could have a credit score of around 700, which is quite good, but if you were to miss paying your bills for a single month, your score could drop down below 600 says one estimator of credit scores, Bankrate. And also if you have more than one credit card your score will be lower if they are all at their upper limits.

There are steps that can be taken in order to raise your credit score which will allow you to qualify for a better rate when applying to lenders. Because it is your current data that your credit score is based on, and not your credit history, by following these steps it is possible to repair your credit score, raising it from 500 / 600 up to around 700 or better, which will give you access to better rates when applying for credit.

Because your credit score can result in significant differences in the rate of interest that you will need to pay, a major benefit of a good credit score is it will allow you to save money by paying a lower rate of interest than you other-wise would if your score was low, and can also help simplify your financial dealings. If the interest rate you are offered when applying for credit is not good, but your credit score is, then enquire as to why, and if you are not offered a better rate then shop around until you find one that is acceptable.