Lenders may refuse to lend you or may lend at high interest rates if your credit score doesn't meet a certain grade. Credit scores are determined by information which are within your credit report which help to measure person's repayment capacity. If you promptly pay your credit, you will be rewarded with low interest rates and huge amount of discount. Normally lender rely on FICO scores which is provided by various credit rating agencies such as Experian, Equifax, TransUnion.

While shopping for a loan, one must review at least once the credit score & credit report twice a year so as to reconcile information about correctness & update it so as to help you know where you stand. You can receive credit report from credit report agencies free of cost. 

Following are the things which may help you to improve your credit score. 

1. You must review your credit score at least twice a year to check out if there is any error & mistake in your credit report which result in low credit score.

2. Late payment& missed payments reduce the credit scores. You must make all efforts to repay your loan within due date and also you must repay your loan before applying for fresh loan.

3. One must try to keep balances below 25% of once total available balance for higher credit scores because FICO scores depends a lot upon how much loan you have taken in relation to how much credit you have available to you.

4. Closing down your old card & applying to new will result in lowering your credit scores.

The important point is how promptly you pay on your bill & not period because this include outstanding debt. The following are the important points to consider while rating your score.

1. Credit History

2. Any credit application or inquiry into your credit history

3. Different types of loans

4. Balances that are too high

5. High interest rates

Score of 700 & more is considered good & person with this high score should have no problem with getting credit & better interest rates. Credit score between 650-550 will face some problems & scores below 450 will most probably not get the credit approval. These people must find the ways to improve these credit score. Free credit counseling are available to person who want to improve these score.