Your credit score may seem like just a three-digit number, but it actually represents your entire credit history and plays a major role in your financial life. The good news? A better score means lenders are more likely to say yes, and you'll probably get some better interest rates.

Sure, paying your bills on time is huge, but there are actually other things that also matter. Once you understand how this all works, you can totally take charge and boost that score.

The biggest one is payment history. It has the greatest impact on your FICO credit score (typically 300-850) and tracks your history of paying bills on time.

Spoiler alert: Lenders love to see a long track record of on-time payments. Your payment history also tracks whether you’ve missed payments, defaulted on loans, or had debts sent to collection agencies.

There are a few simple steps you can take to improve your payment history. Start by making a basic budget so you know you have enough money to cover your bills each month. Setting up automatic payments or simple reminders on your phone can also help make sure you never forget a due date.

When it comes to debt, lenders like to know whether you’ve bitten off more than you can chew. They look at something called your credit utilization ratio to get an idea of whether you’re overextended and might have a hard time making payments on new debt.

The credit utilization ratio measures how much of your available credit you’re actually using. In math terms, it divides your total balance by your total available credit. For example, say you have a credit card with a $20,000 credit limit and a balance of $10,000. You’re using half your available credit, so your credit utilization ratio is 50%.

What’s a good credit utilization ratio? While there is no hard and fast rule, it’s best to try to keep your ratio at 30% or lower. If you’re already above that level, don’t worry. You can bring your ratio down over time by focusing on paying down your balances or even better, paying off debt entirely.

In general, the longer your credit history, the better it is for your score. A longer history shows lenders that you’ve been able to manage your debts responsibly over time and keep good, long-term relationships with them.

We’ve all seen credit card offers with great rewards or low interest rates, and it’s easy to feel tempted to apply. Even though applying might seem harmless, opening new credit can actually lower your credit score for a short time. Lenders may worry that taking on too much new credit could make it harder for you to keep up with all your payments.

Fortunately, this is an easy one to manage. Don’t jump at every credit card offer that comes along or apply for any unnecessary credit. Instead, focus on using the credit you already have wisely.

Finally, there’s credit mix, which just means the different types of credit you have, like credit cards, car loans, student loans, or a mortgage. Having a variety of credit can help your score because it shows you can handle different kinds of payments at the same time.

If managing debt feels tough right now, don’t stress about adding new types of credit. Focus on paying what you already owe and making your payments on time. Once your finances are in better shape, you can think about expanding your credit mix later.

You can start this journey from paying all your bills on time, since even one late payment can lower your score. Later, try to set up automatic payments or reminders. If you keep your credit card balances low it also makes a big difference.

Try to use less than 30% of your available credit, and even less if possible. Applying for too much new credit at once can hurt your score, so only apply when necessary. Keeping older credit accounts open helps maintain a longer credit history. A mix of different credit types, like cards and loans, can support your score. You should avoid taking on new debt just to improve your credit mix.

And finally, regularly checking your credit report for errors and disputing mistakes can lead to quick improvements.