More and more Americans are checking their credit and understand how the scoring system works.

Fifty-seven percent of consumers have obtained at least one credit score over the past four years, up from 49 percent four years ago, according to a survey by the Consumer Federation of America and VantageScore Solutions.

The survey also shows that people who get their score know much more about how the system works than those who do not. For instance, large majorities of people correctly identify three key factors used to calculate credit scores – missed payments (86 percent), high credit-card balances (81 percent) and personal bankruptcy (79 percent).

Even so, there are gaps in knowledge. Significant minorities incorrectly think that age (41 percent) and marital status (38 percent) are used in the calculation. And majorities wrongly believe that tax liens (64 percent), medical collection accounts less than six months old (62 percent) and civil judgments (63 percent) are used to compute scores.

So, should you fall into that knowledge-gap camp, here’s what you need to know about how credit is scored and how to raise that score.

• Get a copy of your credit reports: Go to and download a free copy from each of the three main credit bureaus.

Credit scores are an important piece of a person’s financial puzzle, and people should make every effort to improve it to get the best rates.

Next, review your reports and identify mistakes and/or information you feel is incorrect.

“If you believe something is inaccurate, by law you are allowed to dispute the item(s) with the credit bureaus to attempt to have it removed,” Lewis-Parks says.

Do that by submitting a dispute letter, along with any documentation or proof that the information is inaccurate. The bureau then asks your creditor or lender to verify the information provided, Lewis-Parks says.

“If it can’t be verified, then the item must be removed from your report,” she says. “Also, if an item appears on the credit reports from all three bureaus, you will have to make your dispute to each bureau separately. The bureaus do not communicate and share information with each other.”

Note that your credit score is calculated from your credit report.

Learn the factors

Many factors affect your credit, and each represents a different percent of your score:

• Payment history counts for 35 percent of FICO, a widely used score: To lenders, your history of payments indicates whether you’ll make payments on time in the future. A FICO score is a three-digit number calculated from the credit information on your credit report at a consumer reporting agency at a particular point in time. It summarizes information in your credit report into a single number that lenders can use to assess your credit risk quickly, consistently, objectively and fairly.

• Amounts owed count for 30 percent of your FICO score. Plenty of available credit relative to the amount owed indicates to lenders that you manage credit responsibly.

• Length of credit history counts for 15 percent of your score. The age of your oldest account tells lenders how much experience you have handling credit.

• Credit mix in use counts for 10 percent. Lenders will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans.

• New credit counts for 10 percent of your FICO score. To lenders, opening too many new accounts in a short window of time could point to problems.

Your credit score can vary from provider to provider. Here are the credit score ranges used by major credit scoring models, according to

  • FICO score range: 300-850
  • VantageScore 3.0 range: 300-850
  • VantageScore scale (versions 1.0 and 2.0): 501-990
  • Experian PLUS score: 330-830
  • TransUnion new account score 2.0: 300-850
  • Equifax credit score: 280-850

Develop a game plan

Building – or rebuilding – credit scores can be done, but it does take some time.

Steps your plan should include

• Pay bills on time: If you fall past due, pay the bill as soon as you can. Look into automatic payment options so you won’t miss a payment.

• Keep card balances well below the limit: Don't use more than 40 percent of your available credit lines. And, if you want to pay down or pay off multiple credit cards, pay off the one that has the smallest balance first, then pay the accounts down or off one at a time.

Don't use more than one-third of your available credit on each card or line of credit. As soon as you go over the one-third, it is affecting your credit in a negative way.

• Pay off negative/collection balance on report: According to Holt, paying off old debt, such as credit cards, collection bills and medical balances, helps you avoid any further collection or legal action that could become more damaging to your credit.

Negative marks on your credit can remain on your reports for up to seven years or sometimes more, so the sooner they’re resolved, the better.

Be patient. It may take some time to see improvement, but in as little as six months you can see positive results.

• Keep inquiries to a minimum: Opening and closing credit cards can also impact your score. So when you apply for new credit, the lender makes a hard inquiry on your credit report, which might shave a few points off your score

• Have a nice credit mix: If you only have a car loan, apply for a credit card as well. You want to have a variety of credit.