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You know it's important to have a strong credit score.

But exactly what kind of sway do these three digits have?

Let's say you're getting a 30-year mortgage for $400,000. A score of 760 rather than 680 could lower your interest rate enough to shave $98 in interest off each month, according to FICO estimates. That's a reduction of more than $35,500 overall.

Or, if you're taking out a six-year $45,000 loan to buy a new car, a FICO score of 740 versus 640 would save you an estimated $56 a month — cutting your total interest by 30%. (Plug in your own numbers with this FICO calculator.)

In fact, last year Bankrate estimated that borrowers with a credit score of 620 versus 700 were paying an extra $3,400 a year, on average. This reflected not just higher interest rates on mortgages, credit cards, and other loans, but higher home and auto insurance premiums too.

So what?

A good credit record is about more than getting a yes from a lender. It may also qualify you for lower interest or insurance rates, which can save you thousands of dollars a year.

Building a stronger credit score doesn't have to take forever, either. (This SoFi calculator can help you gauge where you'll be in six months.)

Here's how to move the needle:

Always make your credit card and other loan payments on time. Your payment track record is the single biggest influence on your credit score. Setting up automatic payments or reminders can help ensure you're paying on time. If you don't have the money, reach out to the lender before your payment is due. They might give you a temporary reprieve or reduce your payment.

Avoid carrying credit card balances from month to month. If at all possible, only charge what you can afford to repay in full each month. Otherwise, interest will accrue on the remaining balance. The interest compounds over time, meaning you pay interest on the interest that has been added. This increases the total amount you have to pay back and can make it harder to keep up with your debt.

(And no, you do not need to carry a small balance on your credit card to show banks you are "using" your available credit. That's a myth.)

Don't max out your credit limit. Charging as much as you can on your credit cards signals to lenders that you could be overextended and, in turn, may be more likely to default. Generally, the lower your balance relative to your limit, the better — unless you're not using your card at all. One rule of thumb is to avoid using more than 30% of the total credit available to you.

Go slow with new applications. Only apply for a credit card or loan when you really need it, because submitting multiple applications (aka "hard" inquiries) too quickly can be a red flag for lenders.

Check your credit reports and score regularly for errors. There's no penalty for checking your score or your credit reports, which are maintained by the three national credit bureaus — Equifax, TransUnion and Experian.

•   Use AnnualCreditReport.com to get free access to your reports as often as once a week.

•   Use a free credit score monitoring service, like SoFi's, to check for mistakes or fraud. If you see something, report it to the bureaus right away.

Related Reading

How Income and Salary Affect Your Credit Score (SoFi)

Mortgage Lenders Now Have More Credit Score Options. What Homebuyers Should Know (CNBC)

Penalized: The Hidden Cost of Credit Score in Homeowners Insurance Premiums (Consumer Federation of America)

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