Like it or not; banks, credit cards, and other lenders use your credit score to determine your credit-worthiness. This score along with total income are used to determine how much and what terms/rate to lend money to you. So any person concerned with borrowing money either now, or at any point in the future needs to be concerned with their credit score.
The two largest factors in determining a credit score are: payment history and debt amounts. Payment history looks at on-time payments. Debt amount focuses on how much available credit is used (on a per account basis and on the sum of the accounts). For example if one has $10,000 of available credit on all combined credit cards and it currently utilizing $9000 this would have a negative effect on one's credit score. Also, if one has a credit card with a $1000 limit and that credit card has a balance $900 that would also have a negative affect on ones credit score even if the rest of your credit has low utilization.
Two cautions here:
1. In the past I've gotten credit lines for 0% interest rates for medical procedures and for large jewelery purchases. These often show up as credit cards on your credit report, so be aware if you get Laser Eye Surgery for $4000 with the special 0% offer that will show up as 100% utilized on your credit report. One way to fix this is to negotiate for more "credit" than the purchase will be. And yes 0% introductory offers do always count in your credit score.
2. Your credit score is based on a moment time, so even if you pay off your credit card bill in full every month you can still run negatively affect your credit score by having over 30% on any one card or the sum of all your cards. Not a major issue but just be aware of this if you are shopping for car or home loans. You can address this problem by requesting to increased credit limits- remember the gold rule, "if you don't ask you don't get!" You can also pay off your card in the middle of month.
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