Unless you’ve been living off cash only, which doesn’t even seem possible anymore, you’ve no doubt been faced with the importance of your FICO credit score. It affects your ability to get credit cards, make large purchases, and it may even affect the hunt for a new job or apartment.

So, what is a FICO credit score, and why is it so important. The FICO score was developed by Fair, Isaac & Company in 1989, and it’s what lenders use to decide on your creditworthiness.

With your FICO score playing such a crucial role in many parts of your life, it’s a good idea to keep an eye on it. Many credit card companies now offer free reporting from one of the three main credit bureaus—Experian, Equifax, or TransUnion, and that allows you to monitor your score for monthly or bi-monthly changes. If you don’t have access to reporting through a credit card, you can also request a free annual credit report without affecting your score.

FICO credit scores range from 300 to 850, so the higher the score, the better your credit rating is, and the easier it will be to get credit.

Here’s a breakdown of how the three credit bureaus generally look at the ranges of FICO credit scores:

Regardless of where your FICO score falls in the table above, it’s based on five main categories, each with a different representative value:

35% Payment History: This includes missed payments, late payments, and on-time payments. Missed payments can show up in your history for years, so make payments on time or make arrangements with your lender if something ever comes up.

30% Amount of Credit Used: How much of your available credit is being used and what your overall debt-to-limit ratio is. It’s best not to exceed 30% of the total available debt in use.

15% Length of Credit History: The longer your credit history, the better, especially if that history is clean with good payment history, etc.

10% Credit Type: This measures the mix of credit sources, including credit cards, auto loans, mortgages, personal loans, etc. A good mix of credit/loan sources strengthens your score as long as the debt ratio and payment history are maintained.

10% New Credit: Recently opened credit accounts will bring your score down until payments start bringing it back up, and a flurry of new accounts can cause lenders to pause on approving a new loan. It’s never a good idea to open new accounts right before trying to get a home loan, for instance.

You can see the value in always making your payments on time, and just because you may have a lot of available credit, it can hurt your score when you exceed 30% of the total limit. Those two categories alone carry a lot of value because they show a certain level of responsibility when it comes to spending.

Your FICO score carries the most weight when lenders are deciding on your creditworthiness, but it’s not the only thing they look at. Other factors can play into this as well, including your debt-to-income ratio, employment history, income (salary), and available funds (bank balances).

Your credit score is the first thing lenders generally look for, though, so it’s important to do what you can to improve your score. If you have an excellent or exceptional FICO score, borrowing is quicker, easier, and more affordable because of better interest rates. The lower your score, the tougher it can be to get loans or credit, the higher your interest rates will be, and once you get down into the poor score range, it’s less likely to get approved at all, or you’ll have to be cautious of predatory lenders.

Once you understand your FICO credit score and decide that you need a personal loan to cover unexpected expenses or repairs, apply with Helix. It takes minutes to apply for your loan, seconds to get a decision, and you can receive the money you need as soon as the next business day.