Your credit score is increasingly important these days, since not only can a poor score impact your ability to get a loan for a home or a car, or to qualify for another financial services increasingly employers are checking potential new employees credit scores to access how well they cope financially, which many hiring managers, unfair or not, take as a demonstration of how responsible a person is.

Is your credit score below 630? If the answer is yes then you may want to start doing something about it, as a score below 630 is considered unfavorable by most banks and lending institutions. In order to begin improving your number you need to first understand how the credit bureaus come up with it in the first place. The following factors are generally examined when your credit scores are calculated:

Payment History – The more of your bills you pay in a timely and consistent manner the better your score. However general utility bill payments are not usually reported to a credit bureau unless they go into collections, so are not much help if you are trying to build credit. If your credit score is below 630 one way to increase it is by applying for a secured credit card, using it wisely and paying off more than the minimum balance every month.

Outstanding Balances – When it comes to any credit cards you may hold try to keep any outstanding balance to less than 30% of your available credit and keep car and home loans to a minimum.

Recent Inquiries – Too many credit applications can damage your credit score. Every time a lender checks your credit report it creates a “hard inquiry” so if you are applying for a mortgage or another line of credit do your research before you apply, and keep the number of actual applications you make top minimum.

Credit Mix – In order to stop your credit score falling below 630 your credit file should contain a balance of credit accounts and traditional loans. If you are considering consolidating some of your debt you need to remember that long standing positive credit lines can go a long way towards preventing your credit score from slipping below 630, so do not completely close long standing credit accounts on which you have a positive payment record.