Welcome to Two Minute Money, Yahoo Finance’s new personal finance series offering quick explanations for some the the most important questions involving your money.

If you’ve ever applied for credit you’ve probably heard about: your credit score.

But may not be exactly sure what it represents.

Your credit score is a number between 300 and 850. That takes into account your bill paying ability, amount of debt, length of credit history, total number of credit lines, and variety of credit.

Why does credit matter? Your credit score is your key to opportunity. A good score unlocks financial benefits like home, auto, and business loans.

A bad score can lock you out of an apartment you’d like to lease, or a car that requires financing.

So what’s a good score to shoot for? Any score above 720 should give you preferential lending terms. Translation: lower interest rates on your next mortgage, car or credit card.

But there’s a catch: your credit score isn’t etched in stone. Your financial health can change over time because of unforeseen circumstances like expensive medical bills, job loss, or increased cost of living that can lead to missed and/or lower than usual payments.

So how can credit first-timers build their score?

Start small. Get a smartphone contract, and prove you can pay bills on time. And when the time comes get a credit card, practice good habits. Never miss a payment. Even a single 30-day delinquent payment could drop your score anywhere from 60-110 points. Stay under 30% of your limit. Don’t take out too many lines of credit.

These are the key components that make up 80% of how your credit score is judged.

So how do you check your score? You’ll get one free report a year if you ask for it from three major credit bureaus: Experian, Transunion, and Equifax.

All you need to access your report is basic personal information like name and address plus your social security number. You can also check your credit score for free through your credit card company’s website or app. And don’t worry, you won’t get dinged. So don’t be shy. Find out where you rank.

Once you know, you can start managing your credit using these simple rules.

• Remember the factors that make up your score.

• Practice good spending and payment habits.

• Check your score quarterly and inquire about major changes.

• If you’re a first time borrower, take it slow and be patient.

Remember: 60% of people don’t know their own credit score.

Welcome to the smart 40% who do.

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