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What to know about a credit score comes down to first of all realizing that, in conjunction with a credit report, the score that’s paired with it can affect almost every aspect of a consumer’s life. Today, almost nothing of consequence can be financed without a report and a score being accessed by the organization doing the financing. A low score can mean something will be more costly to finance, for a fact.

What’s generically referred to as a “score” is usually the numerical index assigned to a person’s credit history by one of several organizations, with the most-common being the FICO (“Fair Isaac Credit Organization”) score. Each of the three major credit reporting bureaus (TransUnion, Experian, Equifax) have their own internal scores, but FICO is considered the industry standard.

Never forget that a “low” score (usually, 600 or below is considered a low score nowadays, though some bureaus now consider 650 to be low) can end up costing a person looking for consumer credit or a home or auto loan a great deal in terms of it being more expensive to borrow that money. And employers are beginning to look increasingly at a score and credit history in terms of hiring decisions.

There are reasons for this phenomenon, including that employers are concluding that a credit history and score might provide a clue as to what a prospective employee’s work ethic or on-the-job performance may be once he or she is hired. Many HR experts dispute this belief, and the law says that an employer must obtain permission before accessing a person’s credit history and score.

Also, it’s becoming more difficult to obtain a mortgage these days with a low score. In fact, those with such scores might not be able to get a loan at all without a significant down payment. And even auto insurers are getting in on the act and are pulling credit reports before extending indemnity coverage, though more than a few states are starting to outlaw that practice.

The things to do to raise a credit score are fairly common sense and revolve around paying things on time. FICO has recently released information that allows people to see how it goes about formulating a score and it confirms the need to avoid bankruptcy or home foreclosure if at all possible. Both those actions can lower scores by about 200 points. A late credit card payment can drop a score 10 points, at minimum.

Keep in mind that credit cards that are maxed out or near their upper limits can drop a credit score by up to 50 points. It can also be raised gradually by paying down amounts owed (improving the debt-to-earnings ratio) and by making payments on credit cards that are a little bit more than the minimum payment needed. Individual credit is an individual’s responsibility, and never forget that.

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