Consumers remain in the dark about how the credit-scoring system works in obtaining mortgages, insurance and credit cards, costing individuals as much as $28 billion each year, according to a recent survey.

Credit scores are a vital but often overlooked part of people’s financial health. The number, also known as a FICO score, determines interest rates on credit cards and is being used increasingly by insurance companies to set rates, as well as by prospective employers in hiring decisions.

Taking steps such as paying bills on time and not maxing out credit cards will improve scores. Scores also can be improved by paying off debts, rather than moving balances between accounts. Paying more than the minimum due on credit cards also improves your FICO score. Missing a single payment by more than 30 days may lower your score by 25 to 50 points.

One of the most important steps individuals can take is to obtain their reports from one of the main credit-rating companies: Equifax Inc., Experian Group Ltd. and TransUnion. An easy way to do this is through the www.annualcreditreport.com Web site the three companies run together. Consumers can obtain one free credit report each year.

According to Stephen Brobeck, executive director of the Consumer Federation of America, “People responding to the survey didn’t understand that credit scores are based on payment histories and how they’ve used credit in the past. Many respondents said factors such as income, age, marital status, and education levels influence credit scores. They don’t.”

A low credit score means you’ll spend more money to borrow. Raising a credit score by 30 points translates into an annual credit card finance-charge saving of $105, according to Anthony Vuoto, president of Washington Mutual Card Services. If all consumers raised their scores by that margin, he said the savings would reach $28 billion.

Have you obtained a copy of your credit report since they became free once a year? If not, you should. Getting a copy of your credit report is also a good way to detect identity theft, because there will be evidence of anyone trying to open new accounts or obtaining credit cards in your name.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

We don’t take any seller listings (yet we have more homes for you to see than most agents) and never have any potential conflict of interest like other agents who also represent sellers. We represent buyers only, 100% of the time. We can show you more homes for sale because we have access to MLS, FSBOs, Exclusives (homes that agents try to keep secret), foreclosures and homes not on the market that may be of interest to you.

We are not your traditional real estate agent. Our goal is to advise and protect home buyers and help them obtain the lowest price and best terms on their dream home. Call us at 516-887-6901 to see how we can help you save time and money. Or visit our sites at www.bestbuyersbroker.com or www.bestbuyerbroker.com

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