For a three digit number, your credit score sure can say a lot about you to the world. Since banks and lenders look at your credit score when you request a loan, it can have a huge effect on your major buying decisions. Buying a home, getting a car, refinancing – if your credit score is too low, you can kiss those things goodbye.

Any time you request a loan or apply for a credit card, your credit score will be pulled. Lenders look at your credit score to determine whether you are a high or low risk lendee. If your score is high, you’ll be approved – if it’s low, then your loan will be rejected. The higher your credit score, the lower your interest rate should be as well.

So what is a credit score exactly and who or what determines what yours is? First off, credit scores are determined by the big three credit reporting bureaus, such as Equifax or TransUnion. That means you technically have three distinct credit scores, though all should be around the same number.

These agencies determine your credit score by examining a variety of factors about your credit history. Debt to income ratio and credit availability are the big factors. Late or missed payments, bankruptcy claims, disputed debt and more also factor into your credit score.

Taking all this information into account, the big bureaus then assign you a credit score – which is really like a grade. The highest you can hope for is 990, but consumers with perfect scores are hard to come by. In fact, not every agency’s credit score measurement is as high as 990. Some stop around 850.

Whatever the highest score is, you want to get as close to that as possible. A credit score of 725 or higher will get you approved for a loan. It should also earn you low interest rates. What is considered a good credit score can change with the economic climate as well – the tougher the economy is, the tougher lenders will probably be on approving loans.

Your credit score paints a picture of you as a consumer to any company pulling it. It gives them an idea of how responsible you are with your money and paying debts. It even gives them an idea of how early on you began building up your credit, or if you haven’t at all! You may even have to allow potential employers to pull your credit score and history nowadays.

Given how important a credit score can be, you should find ways to keep on top of your credit score and report. Many sites online offer free trials so that you can pull your score and report without paying. It’s important to do your research on these sites though, and not get sucked into paying for information you can get for free. Keeping on top of your credit score will allow you peace of mind the next time a big buying decision pops up.