The following are some tips to help you improve your credit situation.

STUDENT LOANS. As most former college grads struggle with exorbitant student loan payments, it is possible to reduce your monthly bill and with time, have the federal Income Based Repayment Program extend you their forgiveness on your debt.

But don’t get too excited yet. The all powerful credit scores do not just reflect our ability to pay bills on time, they dictate how we will go about our lives. If there is an unscrupulous mark on our credit reports, like a thirty day late payment, all of the years you spent paying your bills on time can fly out the window.

Credit scores have been the star of the show during the recession, as consumers and debtors attempt to pay up their mortgage payments and revolve debt. Many people- even those who have had long time high credit ratings, have grumbled that their scores have plummeted as credit card companies cut limits and close inactive cards.

Regardless of these facts, experts allege that consumers should not focus on their scores, they should hone in on the information that is contained in the report. According to one analyst, “the score is merely a reflection of what is in the report.”

Of all of the information contained in your credit report is the history of your bills. Have they been paid? Everyone tells you this, but it is worth reiterating. Pay your bills on time every month! Did you know that thirty five  percent of your FICO credit score is tied to that payment history?

An additional thirty percent of your score is founded on your outstanding debt. Obviously, lenders have an expectation of you to use your credit cards, but they clearly want you to do so with caution. If you have three credit cards with a sum amount of $30,000 in available credit, they will examine how much of that money you are utilizing. Unoriginally, this is called your utilization rate. Don’t max those cards out! In fact, don’t even think about coming close to it!

It’s pretty simple to determine your utilization rate. Just add up all of your outstanding balances and divide that by your total credit limit. This should produce a number less than one. If it hits one, you are maxed out and out of luck.

Ready for some secret insider information? Most credit analysts (credit bureaus included) will suggest that you keep your credit utilization under thirty percent of the total limit. But here’s a trick. Be sure that you do this for each card. If you go over that threshold on one card, let’s just say for argument’s sake you max out one card, use only ten percent on another card and nothing on a third card, you are safely under thirty percent of the total limit, but you will still be slammed for utilizing so much of the limit on the first card.  

How much of your limit you use any month can also turn things around on your card. If you max out a card every month but pay it in full, it is still possible that you will be hit for reaching your limit. Credit card companies do not report if you have paid off your card, only how much you have spent.

Additionally, about fifteen percent of your score is based on your credit history, which doesn’t work out well for college grads just hopping on for the ride. But, if you’ve been managing your credit well for a couple of decades, your numbers are likely to be pretty cushy.

But don’t forget this key information. The higher you climb, the faster and further you will fall. If you have been doing an immaculate job of looking over your credit for two or three decades and one month you miss a payment, you automatically will get put into a much riskier credit category than your friend who pays a little late on her monthly payments.