Top 5 Ways to Repair Your Credit Score

Your credit score is a very important number and yet an alarming amount of people have no idea what they score. The big reason to improve your credit score is so that you can tap into great interest rates and other perks which go to people with the highest scores. High scores are deemed most reliable and likeliest to pay back loans. One common misconception is that it takes a long time to fix credit. While credit score improvement doesn't happen overnight, you can make solid gains in just a few months - only a few billing cycles.

Top 5 Tactics to Repair Your Credit Score:

1. Beware of your debt distribution. Ideally your debt will be 30% or less of your total credit limits. Count the limits on each of your cards and learn whether you're past the threshold. If you are, this has a very negative effect on your score. Pay down some debt so you're below 30% debt and your score should rebound.

2. Keep your credit history long. Don't ever close your oldest credit accounts because they add valuable history to your credit report.

3. Stay away from new credit. Any time a potential creditor pulls your file, it's called an inquiry. Too many inquiries in a two year period can affect your score. In general, don't ask for new credit while you're working on improving your credit score.

4. Pay off debt. Consider asking a family member for loan to pay off high interest credit card debt. So long as you change your ways and don't rack up more debt, this can be an excellent way to get back on your feet. Typically the terms you'll get for repayment are far better than any bank.

5. Pay on time. Again and again, money experts tell people the top thing they can do to create a sterling credit score is to simply pay bills on time. Most creditors will not report late payments at 30 but at 60 or 90, you almost certainly be reported. If you have late payments in your past, take heart - over time these steadily diminish in influence.