Only about one third of Americans have achieved a FICO score of 750 or higher, according to the July issue of Money magazine. Scores range from 300-850, and you can find out yours for $20 at MyFICOcom

So what does your FICO score really say about you? Well, it’s an indicator of how responsible you are with money and helps potential creditors see how you handle the money you earn and borrow. The higher your score, the lower the interest rate you’ll pay on home, automobile, and credit cards. Lenders use this score to assess the risk you represent.

If your score is low, a lender views you as more likely to be unable to pay back the loan. The idea is that past performance is an indicator of future behavior. A good credit score is considered to be 700 or above. Of course, the higher your score, the more negotiating power you’ll have for a lower interest rate.

What goes into a credit score?

There are five major categories that make up a FICO score. Some factors are weighted more heavily, such as your payment history and debt owed. Here’s a breakdown of all five factors and the percentage totals:

1.  Payment history (35 percent) — More >