While it is always going to be an uphill battle for you to repair a credit rating if you have a history of bad debts, it is not unachievable if you know the steps that need to be taken.

Bankruptcy also adversely affects your credit rating and it takes years to get those black marks off your score. If you have a lower score, you will pay higher interest on credit cards or any loan.

Your credit score is assigned to you based on data that is collected from three credit agencies. The scores vary slightly between agency as they all have slightly different calculations that they use.

The first thing you can to to raise your score is check your credit report and make sure all the information there is correct. Visit AnnualCreditReport.com and get your report for free.

Other companies will charge you for this service, so read the fine print carefully – even if the company says it’s free.

Once you receive the report, check it over carefully looking for any discrepancies. Are they showing you as having made payments late or not at all and you can prove you did pay it and on time? Are they showing accounts that you have already closed?

Also check for identity theft – has someone else been racking up bad credit on your name? You can get your FICO score by paying $15.95 to MyFico.com.

To raise your score, you simply need to do everything right and on time, especially all your bills as these make up around one third of your FICO score.

The later your payments are made, the worse the affect on your score and closing these accounts does not make the problem go away.

How much you owe affects your credit score too. Paying down your credit cards and any other bills you have. Moving the balance from one card to another doesn’t help, it must be paid off. How much credit you are using will affect your score; maxing out one card even with paying at least the minimum amount every month. Asking the bank to raise your limit might give you a bit of breathing room.

If you have been using credit for a long time, you will be treated differently to a new credit holder who would be advised to start with only a small number of accounts initially. Building a good score revolves around building proof of your ability to service your debts.