There are three credit score reporting organizations in the United States; they are Equifax, TransUnion, and Experian. The job of these three agencies is to report on the creditworthiness of each individual person in the country, and they do so by taking inventory of your previous credit and payment histories, your income, and your income-to-debt ratio and calculating them. The resulting calculation is reported as both a ?credit report? and a ?credit rating.?

It is, essentially, the three credit score reporting agencies that produce the information that banks and other lenders use when deciding whether or not to offer you credit, what terms they are willing to offer you, and what your interest percentage will be. Needless to say, the three credit score companies wield a great deal of power over the average American consumer, so it is definitely in your best interest (no pun intended) to establish and maintain as high a credit score as possible with each of the three credit score reporting agencies.

How do you go about establishing a good credit rating? How do you keep it once you do get it? Although there are many folks and groups who specialize in repairing credit and teaching you about credit, the basics of having a good credit score are really quite simple.

First and foremost is to make sure that you pay all your bills in a timely fashion. Once you have gotten some sort of credit, right from day one, it is imperative that you make at least the minimum monthly payment on time each month. Late payments are recorded and are a red flag to other lenders and to the three credit score groups. Of course, although the minimum monthly payment is required, it is not a good idea to pay only the minimum every month on revolving credit such as credit cards. If that is all you pay, you will virtually never get rid of that bill, so for your own comfort and peace of mind, you should pay more than the monthly minimum; in fact, if you are able to, you should pay all but a tiny amount each month.

The second most important thing to remember is to live within your means. If you go around charging all sorts of really cool stuff like designer clothes and big screen televisions, but you don?t have a job that will allow you to pay for these things in a timely fashion, you would be much better off saving up to make the purchase. Alternately, you can save up almost the whole amount, buy the item on credit, and when the bill comes in, send all that money you saved up as a big payment. Then, pay off the remaining small balance a bit at a time. Doing this will look good to each of the three credit score reporting agencies and will likely increase your credit score.

The third most important thing to do is to make sure that you keep an eye on your credit history. You would be amazed how many errors pop up, and identity theft is a real possibility in this day and age. You don?t want mistakes ruining your chances of getting a decent deal when you need credit for big ticket items such as a house or car.