What to know about your credit score.
1. Your credit score can determine whether you get a loan. Banks and lenders look at your credit score when they are deciding to approve you for a loan or not.
2. Your credit score also helps determine your interest rates. A bad credit score can cost you real money, since lenders often charge higher interest rates to borrowers they view as risky. On the flip side, a high credit score can save you some serious cash, since you'll be more likely to score the best interest rates.
3. Your credit score is derived from your credit reports. There are three big credit bureaus -- Experian , Equifax and TransUnion -- and you have one credit report from each. Your credit score is calculated based on the information in these reports. On them, you'll find identification info (like current and previous addresses) plus your history of dealing with credit (like payments you've made on student loans and credit cards in your name.) Under federal law, you're permitted to pull your reports for free once per year. Request one every four months at annualcreditreport.com.
4. It's up to you to get errors fixed. It's important to make sure the info on your credit reports is accurate. If you spot errors -- like an account that isn't yours or a late payment you know you made on time -- it's your responsibility to get them fixed. (Read more: How To Scrub Your Credit Report Clean Of Costly Errors)
5. You can get your credit score for free. An increasing number of credit card providers (like Discover and Chase ) are issuing free credit scores to cardholders. You can also see your score gratis at certain sites like CreditKarma.