Make sure the article you have been asked to review truly matches your expertise
The Editor who has approached you may not know your work intimately, and may only be aware of your work in a broader context. Only accept an invitation if you are competent to review the article.
Avoid a potential conflict of interest
A conflict of interest will not necessarily eliminate you from reviewing an article, but full disclosure to the editor will allow them to make an informed decision. For example; if you work in the same department or institute as one of the authors; if you have worked on a paper previously with an author; or you have a professional or financial connection to the article. These should all be listed when responding to the editor's invitation for review.
Check that you have enough time
Reviewing an article can be quite time consuming. The time taken to review can vary greatly between disciplines and of course on article type, but on average, an article will take about 5 hours to review properly. Will you have sufficient time before the deadline stipulated in the invitation to conduct a thorough review?
Understand what it means to accept to review and manage deadlines
Deadlines for reviews vary per journal. The editors will provide information on deadline expectations with the review request. Let them know within a day or two that you got the request. They will appreciate being informed in a timely manner if you are able to complete the review or not. There are no consequences for refusing to review a paper.
If you feel the review will take you longer to complete than normal, please contact the editor to discuss the matter. The editor may ask you to recommend an alternate reviewer, or may be willing to wait a little longer (e.g., if the paper is highly specialized and reviewers are difficult to find). As a general guideline, if you know you will not be able to complete a review within the time frame requested, you should decline to review the paper.