Ever wonder why some people pay exorbitant interest on car loans, credit cards and mortgages, while others manage to score rock-bottom interest rates? In most cases, it all comes down to your credit score — something that's a bit of a mystery to most consumers.

What's a Credit Score?

What s a Credit Score

A credit score is a numerical representation of your creditworthiness — it's an indicator of how likely you are to pay your debts on time.

In the U.S., credit scores can range from 300 to 850, although it's technically possible to have a score as high as 900 under specific circumstances.

Your credit score is tied to your Social Security number, which means your credit rating follows you for life. Moving to a different state or getting married and changing your name doesn't mean you get a do-over on your credit score.

In most cases you'll have a credit score within three to six months of opening any type of credit account such as a store charge card. The two biggest factors in credit rating are payment history and utilization rate. Paying off your credit card on time while using it regularly will boost your credit score, while missing payments, carrying a high balance and/or opening multiple lines or credits or loans will drive your credit score down.

Why Does Having a Good Credit Score Matter?

Why Does Having a Good Credit Score Matter

If you happen to live off the grid, never plan on borrowing money, renting an apartment or getting a job, making sure your good credit score is respectable might not be high on your priority list.

On the other hand, if you want to enjoy the perks of modern-day life like owning a car, having a credit card or even landing a great job, having a good credit score is a really big deal. Simply put, the higher your credit score, also known as your credit rating, is, the better.

While you might think that your credit score only matters when it comes to borrowing money for a car loan, student loan, mortgage or credit card, prospective employers often run credit checks on applicants, especially when the job involves handling money or valuables. Landlords also do credit checks before turning over the keys to a new tenant, which can make all the difference when it comes to getting a great apartment in a hot rental market.

How Can I Get a Free Credit Score Report?

How Can I Get a Free Credit Score Report

As with all things involving money, there's a lot of shady websites and companies promising free credit score reports. The trick is finding one that's reliable, trustworthy and won't wind up passing on your personal information to scammers or fraud artists.

In the U.S. consumers are entitled to one free credit report from each of the three national credit reporting companies every 12 months, but the catch is, these reports don't actually include your credit score.

On the other hand, setting up an account with Credit Karma gives you free access to your credit scores from Equifax and Transunion, the two top credit reporting agencies in the country. Credit Karma also gives you free tips on how you can improve your credit rating along with info on how to correct errors that could be pulling your credit score down.

Why Credit Karma is the Best Source for Free Credit Reports

Credit Karma is the Best Source for Free Credit Reports

Credit Karma is free, based in the U.S, and they've been in business since 2007. There's more than 100 million Credit Karma members, and the company has a solid track record when it comes to privacy and security. Credit Karma never shares member information with unaffiliated third parties, which means you won't be getting weird solicitation calls or unwelcome ads popping up in your inbox.

Credit Karma is clear that they make money by matching offers from their financial partners with members based on the member's free credit score and profile. Simply put, if you sign up for a free credit score report through Credit Karma, the website will generate a real-time credit score report, a list of tips you can use to improve your credit rating, and a variety of offers from accredited lenders that may meet your needs.

As a Credit Karma member, you're under no obligation to click on any of the advertising partner offers. After all, Credit Karma believes that a free credit score report should actually be free, with no strings attached.