Lenders look at several factors - your income, employment record and savings when granting credit.  when applying for a loan, your credit score can make or break the deal.

Your credit score measures your credit worthiness - the likelihood you will repay your debts. Credit scores are based on a numeric computation of the data contained in your credit report. There isn't one universal credit scoring system - credit reporting agencies and lenders also have their own credit score models - but when you're applying for credit, a good FICO score is big.

FICO is short for the credit score system offered by Fair Isaac Corporation, the company that invented the credit risk score model most widely used by the financial industry.

FICO scores range between 300 and 850. The higher the number, the better risk you represent to lenders.

Your credit score not only determines whether you get credit, but under what terms. With a lousy credit score, you might not qualify for the best credit card or auto rate. You may have to pay extra points on a mortgage or,  not qualify for credit at all.

A good FICO score of 750+ can mean your interest rate on a home loan will be 4 percentage points lower than someone with a 500 score. This can mean over $200,000 in saved interest on a house."

While the exact mathematical formula for determining FICO is a closely guarded trade secret, in terms of broad categories, approximately 35 percent is based on your payment history and 30 percent is based on your level of outstanding debt. So paying bills on time and not overextending yourself go a long way in improving your credit score. Length of credit history, new credit, and type of credit - a healthy, modest mix of credit cards and installment debt is good - are the other categories. And as new information is added to your credit report, your credit score changes.

Know Your FICO Score

You need to know your score to improve it.  that mean's pulling your credit reports, contacting your creditors and paying off your overdue balances. Working with your loan officer,to sove problems.