What you don't know about your credit score can hurt you

Everyone wants a good credit score. We know it's important, but a lot of people don't understand how these numbers are created and how their actions affect them.

A credit score is a numeric way to summarize the information on your credit report. It usually ranges from 300 to 850 and the higher the score the better your credit risk and the better deals you'll likely get from lenders.

A bad score could prevent you from getting a credit card or renting an apartment. It can also increase the cost of services, such as cell phone, electric and cable.

A new survey done by the Consumer Federation of America and VantageScore Solutions finds that many people incorrectly believe personal characteristics such as age and marital status are used in calculating credit scores.

There's also confusion about when lenders are required to tell a consumer of the credit score used in their lending decision. It's after they apply for a mortgage, when they are turned down for a loan and when they don't receive the best price or terms.

There are ways to raise your credit scores. Basically, you need to do things that show lenders you are trustworthy and a low risk. That includes:

Pay your bills on time every month.

Keep a low balance on your credit and charge cards.

Pay down debt rather than just move it around.

Don't open new credit accounts rapidly.

By the way, more than one-third of those surveyed believe credit repair agencies are "always or usually" helpful in correcting credit report errors and improving scores. They are not.

No one can get negative information - such as a default or bankruptcy - removed from your credit report if that negative information is accurate.

Credit score confusion: What you don't know could hurt you