It’s important for everyone in this day and age to understand how credit scores are determined, and exactly how to improve your credit rating.

An individual’s credit score is calculated based on a number of factors, and your rating helps potential lenders decide whether or not you’re a risk. Credit score numbers typically range from 300 to 850 (the lower the rating, the worse the score).

So what is considered a bad credit rating? By rule of thumb, if you have a credit score below 600, you’re most likely going to have a harder time getting loans and have to pay higher interest rates as a result. If your score is over 720, you’re in great shape.