Your credit score is a three-digit number that credit bureaus use to represent your financial responsibility based on your likelihood to repay debt. They determine your score based on information in your credit report such as your credit history and how much debt you have. Generally a score above 740 is considered very good, while anything below 580 is considered poor. Your score may vary over time and may vary by credit bureau.

To improve your credit score, be sure to always make your payments on time, avoid carrying a high balance, space out new credit applications by at least six months, and keep old accounts open even if you’re not using them. It’s also important to monitor your account closely to quickly recognize any inaccuracies or potential fraud that could negatively impact your score.

You have the right to one free credit report annually from each of the three biggest consumer reporting agencies (Equifax, Experian, Transunion), which you can order at 

, you may also get a free report if you suspect you’ve been a victim of fraud, you plan to apply for unemployment, or you’re a recipient of public welfare assistance, to name a few reasons. Otherwise, you’ll have to pay up to $12.50 for a report (though, by law, a credit reporting company can charge no more than that for a report).

Issues like late payments, foreclosures, lawsuits, and student loan defaults can all negatively impact your score, but they should be removed from your report after seven years. Bankruptcy can take between seven and 10 years. If they’re not automatically removed from your report when they should be, you can file a dispute.

Even a minor error on your credit report can have major ramifications on your score and your ability to secure credit at a fair rate. Write to the credit reporting agency to explain what inaccuracies you’ve found — the 

Federal Trade Commission has a sample dispute letter

 you can use. They’re required to investigate the items in question and provide you with the results in writing. You’ll also need to write to the entity that provided the incorrect information to the credit reporting company, to let them know that you are disputing that item in your report.

Technically, you don’t need a credit card. But they’re the easiest way to help you build a strong credit history, which will come in handy when you want to buy a house or car, borrow money for college, or apply for insurance. When used responsibly, credit cards can also offer users valuable bonuses and rewards that can add up significantly over time.

If you’re over the age of 18, applying for a credit card is as simple as filling out a form, either digitally or in print. It’s important to recognize that credit card applications may slightly lower your score, as card issuers will review your credit report before making their decision to determine if you’re a safe candidate. That’s why it’s important to do your background research to make sure the card is a good fit for you before applying.

If you’re new to credit cards, look for secured credit cards or cards with minimal credit requirements in order to maximize your chances for approval. Otherwise, consider factors like fees, interest rates, and the rewards that will be most beneficial to your lifestyle and spending habits.

Closing a credit card account can actually damage your credit score (it may shorten your credit history and increase your credit utilization rate), which is why it’s recommended to simply stop using the account. But cancelling may be a good idea if you’re being charged high annual fees or if you’re having trouble managing your spending. To close a credit card account, pay off or transfer the balance and then contact your card issuer to request an account closure.

You can avoid paying interest on your credit card by paying off the balance in full every month. Otherwise, you will pay interest on the balance.

If you recognize unauthorized charges on your credit card account, contact your card issuer right away and alert them to the suspicious activity. You’ll also need to request to place a fraud alert on your account with one of the three main credit bureaus. Depending on the severity of the case, you may also want to file a police report as well as a complaint with the Federal Trade Commission.

Credit card rewards are incentives offered by credit card companies to encourage cardholders to use their cards to make purchases. In general, the more purchases you make using your card, the more rewards you earn. Rewards may include points, miles, or cash, and are redeemed in different ways.

To choose an appropriate rewards card for you, consider the benefits that are most valuable to you and your current spending habits.

Credit card miles are a type of reward that cardholders can earn by using certain travel rewards credit cards for making purchases. Miles can be redeemed for airfare, lodging, and other travel-related expenses, usually through the card issuer’s website. On average, one credit card mile is worth one cent.

Cash back is a type of reward that cardholders can earn by using certain rewards credit cards for making purchases. It’s essentially a rebate or cash credit for a percentage of purchases made with the card. Some cards offer a higher percentage for purchases from specific spending categories, like travel or groceries.

A personal loan can be used for a wide variety of purposes, from consolidating debt to making home improvements, paying medical bills, or buying a car. You’ll borrow a fixed amount and pay it back in monthly installments with interest over a fixed period of time.

Applying for a personal loan can be as simple as filling out a form online, but getting a loan that is suitable for your needs can be more complicated. It helps to know your credit score, which will impact the interest rates you will be charged, then compare to find an offer that you’re comfortable with. When you find a loan with terms you’re comfortable with, you can apply. If you’re approved, the money should be available to you within a few days.

When comparing loan options, be sure to consider any origination fees, interest rates, monthly payments, and the payback period.

Your debt-to-income ratio is a calculation of all of your monthly debt payments divided by your gross monthly income (i.e. the money you’ve earned before taxes and any other deductions are taken out). Lenders can use this number to assess how likely you are to repay borrowed money.

A balance transfer works by taking the balance of one credit card (or multiple credit cards) and transferring it to another. The goal is to transfer existing debt to a card with a lower interest rate in order to pay off debt faster.

Debt consolidation is a type of refinancing option that involves rolling multiple unsecured debts (such as credit cards, student loans, medical bills) into one loan with one monthly payment.

A reputable credit counselor can offer advice and educational materials to help you manage your finances, including creating a budget and making a plan for paying off debts. Look for a nonprofit credit counseling agency with low fees. Your local bank or consumer protection agency may be able to offer a solid reference.

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