Your credit score is important.

It is what banks and other lenders use to determine your level of risk.

Many factors play a role in your final credit score, like payment history, the length of your established credit, balances on revolving accounts, applications and public records.

The three things that most affect your credit score are

• Payment history
• Total debt owed
• Age of your accounts

Even if you make payments on time, if you have too many open accounts with a large available amount of credit, it can work against you, as the amount of credit you have access to, is also considered, when totaling, your credit score.

Inquiries into your credit score can also actually affect your score, so if you are looking to make a large purchase, shop around first and don’t let anyone check your credit score, unless you are certain that you want to purchase the item.

There are various ways you can restore your credit.

Firstly, acquire a copy of your credit report from the reporting agencies and compare them to see if there are any discrepancies.

If you have made some late payments to creditors, your score will come back in a few months once the payments are received on time.

If however, you have several in collections, repairing the credit score will take longer.

If you can, try and make arrangements to pay on your own, on the outstanding monies.

If you don’t have the money coming in to repay the debt, you may need to seek outside assistance.

There are a number of specialist credit repair services that you can engage, to work within your budget, to come up with affordable monthly payments.

Ultimately, the goal should be to make your payments on time. This includes, utilities, rent, mortgage and any revolving credit.

Any defaults you make can hurt your credit score, even if it only happens for one month.

Cut back on discretionary spending and consider finding ways to bring in extra income.

One way to improve your credit score is to reduce your debt to income ratio.

Try keeping credit card usage below half of the available credit limit and keeping in mind, that too much revolving credit at your disposal, also works against you, select 1 or 2 cards with the lowest interest rate and that you have had the longest.

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