Trying to make sense of how a credit score is computed can be a very mind-boggling task. Being as most of us depend on our credit scores to get everything from a phone hook-up to a mortgage, it is important to know how they work. If you've ever sat and tried to dissect the hows and whys of what those numbers really mean, you may have come up with your own score of zero.

Credit scores came about in the late 1950's and were developed by Fair Isaac & Co, also known as FICO, as a way to consolidate a person's credit profile with a number. Your credit or Beacon score, which is the name used by Equifax, computes many different factors on each person then tallies them up, mysteriously, and appoints us with a number, or score. This score is what is used to determine our credit worthiness.

Even though credit bureaus will not reveal how they determine our scores, we all know the more points or higher we score, the better our chances of approval. Here is some of the favourable information they look for when they have you fill out that long application form.

When it comes to polishing your credit score, age matters. If you are under 21 or over 65, the chances that you are working are not favourable. If you are under or over this age, you will score a zero. However, if you're married, you will get one point. If you're divorced (they're probably assuming child or alimony support), one point. If you are a parent of between one and three children, again, one point. If you do not have any children or oddly enough, have more than three kids, no points for you.

Having a landline phone will easily score you points, but cutting down costs by having only a cell phone will score you nothing. If you've lived in your previous residence for less then three or five years, don't think they've not noticed. Again, no points. If your address places you in a trailer park instead of Bell Air, nada. If you rent an apartment instead of room with a bunch of friends, you will earn a point. If you have a mortgage, better yet. They realize someone has found your credit worthy and given you money. If you're free and clear of your mortgage, you've proven you can pay down debt. No information on how many points for the accomplishment.

Being with an employer for a long time also scores big with FICO and of course, the more you make, the better. The type of credit you have will account for 10 per cent of your score while your current level of indebtedness will make up another 30 per cent of your final tally. When it comes to credit scoring, only 35 per cent of the score is based on payment history but one negative report can sink you like a rock. Obtaining and keeping a good score can be tricky but is worth all the effort once achieved.