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Credit report form with a poor score.

If your credit score isn’t where you’d like it to be and you’re planning to make a big purchase soon, you’re going to want to improve your credit before you begin shopping for a loan. Understanding your credit score and the factors that make it up is one of the first steps to improving it. Below we touch on some of the basic principles for credit scores.

What Is a Credit Score?

Your credit score is a number somewhere between 300 and 850 that tells lenders about your borrowing and repayment history. There are many companies that calculate scores, but one of the most well-known is Fair Isaac Corporation. This is how we get the term “FICO.” Regardless of which company created the score, most use a fairly similar collection of information about you to determine yours.

 

Payment History

How well you paid your bills is a major consideration. If you were late, have [...]