What your credit score means

Most consumers know that they have a credit score, and many are aware of what it actually is. However, a lot of people probably don’t know exactly what that number means.

As more consumers’ credit scores sink below 650, the basic cut-off rate between prime and subprime borrowers, it’s important that they know the consequences of their lower score. According to a new report from consumer financial advice website Mint.com, consumers with a score under 650 are likely to be denied for credit or, worse, given loans with seriously unfavorable rates and terms.

Because many Americans may have ugly looking credit reports, it should also be noted that those negatives will stay on the report between seven and 10 years. However, bad marks do eventually have to be removed from it, and as negatives age, they matter less to lenders, meaning that credit scores can improve over time all by themselves.

However, there are steps consumers can take to improve their credit scores, including making their payments on time – which accounts for 35 percent of a score by itself – and paying more than the minimum on their credit card bills.