Credit scores have become increasingly important in the last few decades. A mysterious number that somehow represents an individual's trustworthiness is now virtually the sole factor behind whether or not a loan for a car, house, or big screen TV will be issued, and at what interest rate. Once realized, this fact suddenly leads consumers to consider a three-digit number to be of extreme importance, and questions arise.

How are these numbers calculated? Which factors make the biggest negative impact on a score? Should a credit card be canceled once it is paid off? Should credit of all kinds be avoided at all costs?

Answers to these questions can be difficult to find, and there may not be a clear answer to all of them. The exact formulas used to calculate credit scores are closely guarded, and every bureau and organization that deals with credit uses its own equation, though a company called FICO is generally considered to use the most standard and correct calculation method. However, knowing what makes up a credit score and how much a credit mistake affects that score goes a long way to helping everyone better control the future of their credit purchases.