Your credit scores are a vital part of your financial life and they don’t sit still. Every time you make a purchase using a credit card, or pay your mortgage, or make a late payment, your credit scores can change.

Your credit scores don’t take account of your race, age or education. They depend entirely on your own financial activity. They take into account your credit history, whether you have been a good or an unreliable borrower, the amount of debt you have, the mix of debt and whether you are in the process of applying for a new loan. If you are new to the borrowing game, you may start with a low score because lenders don’t have any background on you; there is no history to check. So you are unlikely to get the best terms at first. But you can soon raise your score by paying on time, using your credit responsibly and taking debt on gradually rather than all at the same time.

The lenders with whom you do business, your bank, your credit company, your mortgage lender, all report back to FICO, the corporation which compiles your credit scores, and FICO in turn passes the information on to the three credit reporting companies, Experian, Equifax and Trans Union. They sell the information to any lender from whom you seek a new loan. This is a dynamic process. Your credit scores can change for the better or for the worse. You are the one who determines whether your credit scores are good or bad.