Having a high credit score isn't a simple matter of bragging rights. Your credit score can impact everything from your likelihood of getting a loan to your ability to get a job.

Not sure how credit scores work? Here's a quick rundown. Your credit score is based on factors such as your credit history and track record of paying bills on time and in full (or not). An 850 is considered a perfect credit score, while a 300 is the lowest score you can get. According to Experian, one of the three major credit bureaus, a FICO score above 669 is considered a good score, while a score above 739 is considered very good. Translation: If your credit score is 670 or above, you're more likely to get approved for a loan and at a more favorable rate. It's therefore a good thing to learn that according to ValuePenguin, the average credit score in the U.S. has just reached an all-time high of 695.

Group of 30-somethings dining and laughing

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But not all Americans have such good credit, and while you might be quick to blame 20-somethings for bringing down the national average, it's actually the 30 to 39 age group that has the highest percentage of people with credit scores under 620. Meanwhile, Americans 70 and older are the least likely to have a low score, and they're the most likely to have an exceptional score of 781 or higher. Clearly, this is positive news for seniors, but it's also a strong indication that those in their 30s may not have their priorities straight.

What's up with 30-somethings?

Let's think about why Americans in their 30s have the lowest credit scores, especially given the fact that most have had ample opportunity by that age to establish a reasonable credit history. For one thing, many are still paying off their student loans, especially those who went on to graduate school. Furthermore, it's common for U.S. adults to encounter new expenses in their 30s, such as weddings, mortgage payments, or having kids. Throw in the fact that only 41% of all Americans follow a budget, and it's no wonder those in their 30s struggle to keep their scores in good standing.

Poor credit can cost you

Of course, the problem with having a low credit score is that it makes borrowing money more expensive, thus kicking off a pretty vicious cycle of racking up even more debt and struggling to pay your bills on time. And if you want to know how much your poor credit score might cost you, consider this: If you were to take out a 30-year, $300,000 mortgage today with a credit score of 700, you'd be eligible for a 4.101% interest rate, which translates into a monthly payment of $1,450. But with a credit score of 620, that rate would climb to 5.468%, and your monthly payment would jump to $1,697. This means that over the course of just one year, your less-than-stellar credit could cost you roughly $3,000 in mortgage interest alone. All the more reason to work on building that score as quickly as possible -- before that vicious cycle really takes a toll on your finances.

Ways to improve

If you're not happy with your credit score, there are things you can do to build it up. First, check your credit report for errors. An estimated 20% contain mistakes, and clearing up false information could result in an instant boost. Next, work on paying off high-interest debt, even if just a little bit at a time. You may have to cut back on other expenses or temporarily take a second job to make this happen, but the sooner you knock out some of that debt, the better.

Additionally, you should always make a point not to use too much of your available credit. Lenders like to see a credit utilization score of 30% or below, which means that if your total line of credit is $10,000, you should never owe more than $3,000 at any given point in time. Finally, don't let forgetfulness be the reason your credit score is suffering. Set up automatic payment reminders, or, better yet, arrange to have your bills paid directly and routinely from your bank.

No matter what steps you take to raise your credit, the key is to do so before a low score stops you from meeting key financial objectives. Your credit score can impact your life in more ways than you'd think, so it pays to focus on fixing it as soon as possible.

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