Now more than ever, your credit score can make life tough - or a whole lot easier

Bryan and Trudi Sorge used two no-interest credit cards to pay for a new deck at their Pine, Colo., home, unaware the transaction would lower their credit score. "We thought why use the cash, this is easier," said Trudi Sorge. "But because we maxed them out, it brought our score down." When they tried to refinance their adjustable rate mortgage to a 30-year fixed rate, they discovered they'd have to pay $3,185 in fees to get the rate they wanted.

"Having a good credit score in today's environment is more vital than ever," said Curtis Arnold, chief executive of CardRatings.com, which offers credit card reviews. A high score can help get credit, and it may lead to lower rates on insurance, loans, and other products.

Scores between 600 and 649 represent a 31 percent default risk, and scores under 599 mean a 51 percent risk, according to MyFico.com, a division of Fair Isaac Corp., which developed the Fico credit score many lenders use. The maximum score is 850.

A score of at least 700 is the goal, said Carol Kaplan, spokeswoman for the American Bankers Association: "That will guarantee that you have the most likely chance of getting credit, and qualify for the lowest interest rates."

A consumer can raise a credit score, or avoid having it lowered, by maintaining a low debt-to-credit ratio, keeping a good payment record, and building credit history.

A debt-to-credit ratio, or utilization rate, measures available credit relative to the amount of credit that's been used. It should be less than 30 percent, said David BarMack, president of National Credit Education Plus.

One way to lower the ratio is to spread credit across multiple cards, said Kenneth Lin, chief executive of Credit Karma. "Don't have one card that shows extremely high utilization with others that have zero utilization," he said.

Keeping the utilization rate low may be more difficult now than it was a couple of months ago, said Bill Hardekopf, chief executive at LowCards.com, a consumer website.

A lower credit limit changes the utilization rate, especially when total credit is reduced to just above an existing balance, Arnold said.

"We're getting calls from people because they had their credit limit reduced, yet they were good payers and counting on that credit," said Andrea Ayers, of Convergys Corp., which handles customer service for card issuers.

Payment history accounts for 35 percent of the total score, outstanding debt is 30 percent, and the length of credit history is 15 percent, according to MyFico.com. New credit and types of credit used each account for 10 percent.

A 724 score is considered good credit; allowing one account to become 30 days past due lowers the score to 678. Allowing all accounts to become 90 days past due decreases the score to 660, according to Credit Karma's credit simulator.

Silvia Cernea writes for Bloomberg News.