SmartMoney Monday: Your credit score

HONOLULU (HawaiiNewsNow) - Welcome to Smart Money Monday. Today, we're going to learn all about what goes into creating one of the most important numbers in your life – your credit score – and what you can do to make it as high as possible. Credit score companies don't reveal the exact formula on how they arrive at your score, but they do share a few essential items they use from your credit report data.  The single biggest factor effecting your credit score is your payment history. Paying your bills on time, every time, is the best way to way build or improve your credit score. So if you don't want your credit score to be low, don't be late on those bills.

The next biggest factor affecting your credit score is the amount of your credit you're using. Try to only use around 25% of the limit on any credit card.  People with the highest scores tend to use much less than that. The longer you have credit the better, so try to keep old accounts open.

Also, don't open too many credit lines, especially at the same time. That can suggest that you're in financial trouble. Finally, if possible, try to have a mix of different credit lines, like credit cards and an installment loan. The more you can demonstrate you can repay a variety of loans the better.

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