Everyone talks about credit scores and most people have a general idea of what it is, but many do not really understand how a credit score is calculated and what it is used for in the world of business and finance.

Your credit score is a number that reflects your creditworthiness and your ability to handle your finances, and it is what lenders and other business use to determine whether or not to do business with you. A credit score is an overview of your financial history and other factors that are broken down into a number.

Numbers that reflect your credit score can range from a low of 300 to a high of 850. Most lenders will not do business with individuals with a credit score lower than a 600. Good credit ranges from around 700 to the best credit score rating of 850. Your credit score is registered with the three main credit bureaus. Experian, Equifax, and Transunion. Business may choose to pull your credit from one or all three.

Most lenders and business that work on a credit basis will report monthly to these credit bureaus. Your payment history and other factors are reported and used to calculate your score monthly. So how do you keep your score in the good to the excellent range?

Here are five ways to raise your credit score and keep it optimal:

Keep your total credit usage below fifteen percent. This is the easiest way to raise your score quickly. If you keep your total debt across all of your credit accounts below the fifteen percent margin, you can raise your credit score by tens of points.

Keep your credit accounts open rather than closing them. If you open a credit account, don’t close it. Keep it but let it be inactive. The more credit you have over the course of time the better your score will be.

Make payments on time. Don’t be late with any payments.

Don’t apply for more than two credit accounts per year. The more credit inquiries you have, the lower your score will be.

Have a good mix of credit accounts. The more diverse your credit accounts are, the higher your credit score will be. If you show that you are reliable with a range of different types of credit you will be able to reach the 800 range.