When it comes to finances the three-digit "FICO" score is used.  This credit score is widely used by home lenders to determine the credit worthiness of a borrower.  The higher the score, the lower the risk to the lender.

A perfect score is 850, but generally anything at 720 and above will get you into the best possible rate.  If your score is less-than-perfect don't give up, you can still obtain a home loan, but at a higher interest rate.

In the current lending enviroment good credit is more important than ever.  I will give you a few tips that can help your score.

Keep your credit history current.  What I mean by this is that  you need to use your credit cards on a regular basis.  Today I ran into a situation that a customer had been using one credit card and paying that off monthly.  Perfect right?  No, you need to maintain 4 open and active lines of credit with usage at least every 6 months. 

1.  Pay on time - no matter what!  Late payment history is 35% of your score.

2.  Don't exceed 50% of the credit line (on revolving accounts).  Balances vs. credit history is 30% of your score.

3.  Keep your revolving accounts open- Don't play the balance transfer game because length of time counts.  Length of credit history is 15% of your score.

4.  Stay away from finance company credit.  Use banks and credit cards.  Type of credit is 10% of your score.

5.  Don't apply for credit unless you have a need.  Inquires need to be less than 3 in 90 days and less than 12 in one year.  Inquires are 10% of your score. 

You are now able to access your credit report FREE once a year at www.annualcreditreport.com or call 1-877-382-4357.  you are allowed one free report per year from each of the agencies. 

Remember your financial helath is as important as your physical health.