This is one of my most frequently asked questions from consumers. This is a mysterious topic to a lot of people - we've heard rumors about what can raise or lower your credit score.

The pie chart on this page explains what goes into your credit score, or credit rating. Here are the factors they consider, in these proportions:

• 35% History of paying bills on time
• 30% How much debt you have
• 15% How long you've had credit at various places
• 10% Recent applications for new credit
• 10% Types of credit you have (mortgages, credit cards, car loans, etc)

The companies that calculate scores consider their formulas a trade secret - so we don't know exactly what effect all these things have. The higher your score the better. Usually 600-650 is good, 650 and up is very good. Scores below 600 usually have to turn to subprime lenders, who offer less favorable terms - higher fees and interest rates, etc.

PS: When you get your three free credit reports you're legally entitled to each year, you don't get your score. That usually costs $8 or so.

PPS: Checking your own free credit report does not lower your credit score. Another common misunderstanding.