Even if you haven't had major credit troubles, like a foreclosure, your score may have dropped if you missed a few deadlines or boosted your balances when cash was tight. A study by credit bureau Experian found that average credit card balances in the top tier of borrowers are 22 percent higher than they were a year ago.

And some people's scores have suffered even though they thought they were doing everything right. Credit card companies have been lowering credit limits and closing accounts in an attempt to minimize their risk -- 13 percent of people surveyed in January by Credit.com said their card company had lowered their credit limit over the past few months, and 11 percent said a card company closed their account.

Your credit score is the numerical summary of the information in your credit reports, which lenders use to predict the likelihood that you will repay your loans. The most common score that lenders use is the FICO score, which ranges from 300 to 850. The higher the score, the better. The median score tends to run between 710 and 720.

Your credit score can have a surprisingly large impact on your life -- affecting not only interest rates and terms made available to you, but your ability to get an apartment, cellphone service and affordable car insurance. And this magic number can make or break your ability to qualify for a good mortgage deal.

"It has become a very score-driven industry," said John Ulzheimer, president of consumer education for Credit.com. You generally need a credit score of at least 620 to qualify for a loan that can be bought by Fannie Mae or Freddie Mac, which gives you a wide range of mortgage options. Borrowers with low credit scores have always found the Federal Housing Administration mortgage program more welcoming, but even the FHA is growing more demanding about scores. The agency has proposed that, starting this summer, the program allow only borrowers with scores above 580 to qualify for a loan with 3.5 percent down payment. Those with scores below 580 would be required to make down payments of at least 10 percent.

Brad Sherman, vice president of residential lending for Nationwide Mortgage Services in Rockville, said most people need a 740 or higher to get the best rates these days. For people with scores below that level, Fannie and Freddie generally base rates on 20-point brackets of credit scores -- the lower your score, the higher your interest rate and the higher amount of equity, or cash down payment, the lender will require. "Having more equity in a house could counteract a poor score, but you still need to have at least a 620," Sherman says.

Just under one-third of your score is based on the amounts you owe. A key element is the portion of your available credit that you've used, called your "credit utilization ratio." Your available credit shrinks when your card company decreases your credit limit or closes an account. If the balances on your other cards remain the same, then your utilization ratio goes up and your score can go down.

There's good news, however, for homeowners whose home-equity credit lines' limits have been lowered because of declining property values. Such limit reductions do not affect credit scores.

Even a relatively minor score change can make a big difference in your interest rate. According to the FICO Web site, borrowers with scores of 760 to 850 paid average rates of 4.613 percent on 30-year $300,000 mortgages this week, while those with scores of 660 to 679 paid average rates of 5.226 percent -- translating to a payment difference of about $40,300 over the life of the loan. (You can run your own numbers at http://www.myfico.com.)

No matter what happened to your score during the recession, taking the following steps a few months before you apply for a mortgage can improve your score and translate into big savings.

-- Check your credit reports from all three credit bureaus, Equifax, Experian and TransUnion. Your credit score is based on information from your credit reports, and errors can unfairly hurt your score. You can get free credit reports from all three bureaus every 12 months at http://www.annualcreditreport.com, or you can order them directly from the bureaus for about $10 each. It's important to check all three because each can be slightly different, and an error can appear on just one version.

- Beware of offers of "free" reports and scores that require you to sign up for an expensive credit-monitoring program. Maxine Sweet, vice president of public education for Experian, recommends reporting any errors to the bureau online, which can speed up the process because you input the information directly into the bureau's system. Disputes must be processed within 30 days, but they usually are settled faster, she said.

Shortly after Byron Hebert started his business, Daytona Limos, in 2007, he applied for and received two business credit cards from Capital One. With credit lines of $7,000 and $25,000, they were an invaluable tool in managing the cash flow of the Daytona Beach, Fl.-based limousine service.

However, in November, Hebert learned that the cards had one big downside: Capital One was reporting the accounts on his personal credit report. Listing his business’ debt alongside and in the same manner as his personal debt gave the impression to anyone who checked his credit that he was overextended, Hebert says.

Capital One spokesman Steve Schooff says reporting the accounts to both the consumer and commercial credit bureaus is “standard industry practice.”

Traditionally, that hasn’t been the case. JP Morgan Chase and American Express say they check a consumer’s credit report when they apply for a business credit card, but report the accounts to the consumer credit bureaus only if they become delinquent. The accounts are otherwise reported to the so-called commercial credit bureaus, including D&B and Experian’s Small Business Services. Small business owners appreciate the practice, because it allows them to use the cards for business expenses without worrying that they may appear heavily indebted on a personal level, says Gerri Detweiler, a credit adviser with educational web site Credit.com.

When a highly-utilized business credit card appears on a person’s individual report, the negative effect could snowball quickly. For example, the addition of $20,000 of business debt to the $20,000 Hebert already owed on his personal credit cards led Bank of America to close one of his personal credit cards and cut the limit of another, from $35,000 to $9,900, just $200 above his balance. As a result, Hebert’s credit score, once in the high 700s, fell to the low 700s.

“What really gets me is that if I wanted to apply for a loan, I’d have to list my income – I can’t list the company’s entire gross revenues,” Hebert says. “Yet the creditors will look at all the debt my business has, even if the company pays those credit cards.”

Bank of America declined to comment on an individual case. Company spokeswoman Betty Reiss said the company monitors accounts for risk and may make adjustments accordingly.

Capital One is the first large issuer to start reporting business credit-card accounts that are in good standing to the consumer credit-reporting bureaus. And even if small business owners deem the practice unfair, it is legal. Issuers can report business credit-card usage to consumer credit reports as long as they have the business owner’s authorization to check their personal credit, says Gene Truono, a managing director with the consumer regulatory compliance banking practice at BDO Consulting. Typically, consumers grant that authorization when they apply for the card.

Business credit cards can be a valuable cash-management tool for small business owners. They tend to have more generous credit lines and their rates are slightly lower than those associated with consumer credit cards, says Truono. But they have drawbacks that, once the CARD Act comes into effect February 22, 2010, will only get stronger. Here’s what small business owners should know before they sign up.

Most – if not all – business credit cards include a personal liability waiver in their terms and conditions. By opening and using the card, you agree that, if the account becomes delinquent, the issuer can come after your personal assets for the balance. That includes any charges made by any business employees you designate as authorized users of the card.

The CARD Act does not apply to credit cards used for business purposes, says Truono. Although card issuers may elect to apply the same rules to their consumer and business-card portfolios to keep their operating costs low, that move will be a voluntary decision. So, as of Feb. 22, 2010, issuers will not be allowed to hike interest rates for existing balances on consumer credit cards, but they will still be able to do that with the credit cards issued to and used by businesses.

Although most issuers do not report business credit cards to the consumer credit reporting agencies right now, they do report the accounts if they become delinquent. If times get tough for the business and the owner can’t make a card payment, they have to dig into their personal savings in order to keep the account current – or risk a hit to their personal credit.