We all know this much: it should definitely be higher than our cholesterol, our weight, and, for many of us, our SAT Math scores. But what that Credit number actually means and where it comes from are seemingly more difficult things to grasp.

According to a recent survey by CompareCards, 37 percent of Americans said they have no idea how their credit score is determined. This confusion seems also to increase by income bracket, as 58 percent of those making $100,000 or more also confessed credit score ignorance. But when given a list of contributing factors to one’s credit score, most Americans (78 percent) selected the best answers, meaning that instead of lacking knowledge, many of us just lack confidence.

“Credit intimidates people because they think it’s this mysterious, unknowable beast,” says Matt Schulz, Chief Industry Analyst at CompareCards. “But I think even though people find credit really intimidating, they probably understand it a little better than they think they do.”

Let’s put an end to all that doubt. Here’s what your score really means, what actually impacts it, and how you can improve it.

What does the credit score number mean?

Your credit score is essentially a numeric value indicating how risky you appear to lenders. Basically: Why should anyone lend you money? “A good score means that you are very likely – in the eyes of lenders and credit scoring companies – to pay somebody back,” says Schulz. And good scores shouldn’t change unless you’ve done something wrong. If it does change, and you’ve done nothing wrong, this might indicate identify theft, notes Schulz. It might also indicate mistakes from lenders who may have falsely reported a late payment, or a mistake on your credit card limit due to clerical errors. This is why you should always check your report and file a report with whatever bureau your using to check your score: Equifax, Experian, or TransUnion.

Otherwise, a drop in score is most likely on you. And due to several reasons. . . .

What influences the number?

1) Paying bills on time

Dictates: 35% of your score

This should be an obvious one, as your score is essentially just that: a way for lenders to predict how reliable you are at paying back loans. It’s difficult, however, to quantify how exactly credit history will drop your score, notes Schulz. That said, a single missed payment could cost you upwards to 80 points, and the higher the score you have, the bigger this potential loss. And though the amount of your payment may impact other things like your utilization rates, what matters here is simply that you missed a payment. Period.

Of course, paying on time is important. But so is paying above the minimum. “If you only pay the minimum, that’s just asking for trouble,” says Schulz, “because your balance is only going to continue to grow.” The minimum is the least amount you can pay. Not what you should pay.

2) Utilization rate

Dictates: 30% of your score

Your utilization rate is how much debt you have compared to how much available credit you hold. If you’re carrying a balance of $3,000 and have $10,000 in available credit, your rate is 30 percent. “Job number one for anyone with a credit card is to pay your balances off as soon as you possibly can,” notes Schulz. “But generally if you’re looking for an ideal utilization rate, keeping it below 30% is a really good goal.” You can check your rate on free credit score websites like LendingTree.

One way to better your rate is to open another credit card. This expands your available credit, and, so long as you don’t use the card (or use it sparingly), this new credit can lower your utilization rate and increase your credit score. Again: so long as you don’t splurge.

3) Length of credit history

Dictates: 15% of your score

“All things being equal, it’s easier for an older person to have a really good credit score than it is for a young person,” says Schulz. This makes sense; if you’ve consistently paid your bills for a long time, lenders are more likely to trust you. The downside here is that younger credit card users may have a harder time making credit history work in their favor. They simply haven’t been playing the game long enough. Sorry guys, nothing personal.

Length of credit history, however, brings up an important point about bettering your score. “Credit is a marathon, not a sprint,” says Schulz. So play the long game. Open up credit accounts early, spend modestly, pay on time, and wait. “And if you do things right over and over your credit is gonna be fine.”

4) Frequency of credit application and credit matrix

Dictates: 20% of your score

These credit score influencers may be smaller (about 10% each), but they shouldn’t be ignored. Things like applying for too much credit too often can make you look desperate and raise red flags among lenders, says Schulz. Overall, you want to make sure all your credit behavior (especially that on your most recent card) doesn’t look risky. Risky-looking behavior damages your ability to receive your next loan. Risky-looking behavior hurts your credit score. Successfully behavior, however, like handling a diverse set of loans (credit card, mortgage, car loan, etc.) makes you look far less risky. That’s your “credit matrix.”

“Generally speaking credit is about doing three things over and over again,” says Schulz. “It’s about paying your bills on time every time, keeping your balances as low as possible, and not applying for too much credit too often. If you do those three things over and over again your credit score is going to be just fine.”

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