Experian, TransUnion, and Equifax are the three credit bureaus that store credit histories on consumers. Lenders use the scores from these bureaus to determine credit worthiness when an individual applies for a line of credit. While all of these companies calculate credit scores differently, it is important to note that there are five common factors that are taken into consideration when determining a credit score:

1. Payment history—are you a timely payer or did you always pay past the due date?

2. Amounts owed—how much money do you currently owe to your lenders or credit card companies?

3. Length of credit history—how long have you been building your credit? Credit building is like fine wine, the longer it’s aged, the better it tends to be.

4. New credit—how many lines of credit have you recently opened up? Typically, lenders will think an individual who has opened several new lines within a short period of time pose a greater risk to their company.

5. Types of credit—are you establishing your credit through loans, credit cards or both?

These factors are not weighed equally, but they each affect your credit score. Another important thing to remember is that having your credit checked several times within a short period of time, can negatively impact your credit score. In other words, filling out several loan and credit card applications around the same time can lower your score.

You are entitled to one free credit report, once a year, from each bureau. It is a good idea to check and monitor your credit scores especially if you want to apply for a mortgage, credit card or a car loan. Many people are able to catch identity thieves by catching suspicious activity on their credit reports.

Remember that even though your credit score is really important in determining your line of credit, it’s not the sole factor. Lenders also consider your annual income, employment history and other factors.