It's a three-digit number that can affect a lot of other numbers in your financial life. The higher your credit score, the lower the interest rate you'll pay on things like a mortgage or a new car - and that can save you thousands of dollars over the life of those loans. So if I asked you right now to tell me your credit score, could you do it? If the answer is no, you are not alone.
"People are just not checking their score. Forty percent of Americans, according to a survey by Chase Slate, don't know what their credit score is," says personal finance expert Farnoosh Torabi.
To help shine some light on the problem, Torabi, host of the "So Money" podcast on iTunes, says Americans need to educate themselves - not just about what their number is, but how it's determined. She says the biggest factor is your payment history.
"Credit score calculators like to see that you are paying your bills on time every month in full in order to really boost that score. So when you are just paying the minimum, you're not doing yourself or your score any favors," she says.
While it's important to pay off your debt, she says don't make the common mistake of closing your accounts when the balance hits zero.
"'I've paid off my debt, I'm going to shut off my account, that's a good thing' - that's actually not helpful," Torabi says.
That is because closing that account will change what's called your debt-to-credit ratio, which makes up about a third of your score. That measures how much debt you have versus how much you can actually borrow.
"And when you shrink your credit allowance, you effectively raise that ratio and that hurts your score," Torabi says.
And although you want to keep those old account open, you also want to be careful about opening too many new accounts because every time you apply for card, the lender checks your credit.
“That's a hard inquiry, and many hard inquiries especially over a short period of time can negatively impact your score," Torabi says.
The good news is that even if your credit isn't up to par, a few small changes can give it a big boost in a small amount of time. Torabi points out that creditors report your activity to credit agencies once a month.
"So every month you have a chance to make an improvement,” she says. “If you are paying your bills on time and knocking down your debt, rest assured that over a six month period at the least you should see an improvement."