A credit score plays a big role in your daily life. It can determine the interest rate a consumer is going to pay for credit cards, car loans and mortgages — or whether they will get a loan at all.

The three-digit number is designed to predict risk — specifically, the likelihood that you will become seriously delinquent on your credit obligations or default.

While there are many credit scoring models, one dominates the market — the FICO credit score.

A FICO score is comprised of five major factors, although some are weighted more heavily than others, such as payment history and debt owed. Here’s the breakdown:

  • Payment history: Your account payment information, including any delinquencies and public records.

  • Amounts owed: How much you owe on your accounts. The amount of available credit you’re using on revolving accounts is heavily weighted.

  • Length of credit history: How long ago you opened accounts and the time since account activity.

  • Credit mix: The mix of accounts you have, such as revolving and installment.

  • New credit: Your pursuit of additional credit, including credit inquiries and the number of recently opened accounts.

With that, there are a few simple things you can do to get your finances on track. Here are his six ways to better manage your credit and improve your score:

  • Pay your bills on time, every time. Delinquent payments and collections have a major negative impact on your score.

  • Keep balances low on credit cards and other revolving credit.

  • Apply for and open new cards only as needed. Opening additional accounts to have a greater credit limit won’t significantly improve your score.

  • Don’t close unused credit cards. Doing so may actually lower your score.

  • Protect your credit information from fraud and identity theft.

  • Check your credit report for accuracy.