Credit reporting agencies evaluate your credit history and assign you a credit score, a number that can make or break your immediate financial future. Your score determines whether or not you qualify for future credit, and the interest rates on any loans you receive. Your credit score needs to be as high as possible to ensure that you can get low interest loans if you decide to apply for a car loan or a mortgage. If your credit report contains any negative trade-lines, now is the time to start repairing your credit score.

Because a good credit score is a reflection of a good credit report, you need to order your free annual credit report today. Under the Fair Credit Reporting Act (FCRA), you are entitled to a free copy of your credit report from each of the three main agencies once every year.

Once you have copies of your reports, go over the information carefully. Check names, addresses, account numbers, balances, and payment histories; errors in any of these sections can have a negative impact on your credit score. Credit reporting agencies are notorious for mixing up information and filling credit reports with inaccuracies. Check your personal information as well as your account information as errors can be found throughout your report.

If you find information on your reports that is not accurate, you must dispute it immediately with the credit reporting agency. Write a letter to the CRA asking that they verify the information; if they cannot verify within a certain period of time, they must delete it. Make sure to explain in your letter exactly why you believe the information does not belong on your report.

If your credit scores are lower than you expected or hoped, there are steps you can take to bring repair your score. Always pay your bill on time; late payments can really hurt your credit score. Stop living beyond your means; if you cant pay cash, then dont buy it. Do not take out any future loans, and do not cosign for anyone else taking out a loan. You have to commit to taking responsibility for your credit before you can improve your score.

Get rid of your high interest-rate credit cards. Take our a consolidation loan to pay off all your balances, or transfer those balances onto a low interest-rate card. Either of these options can help reduce your debt by lowering your interest payments and allowing you to pay down your principal faster.

Improving your credit will help you regain control of your financial life. Credit counseling is available to help you draft a debt management plan if you dont feel you can handle that burden alone. Knowing your credit score and credit history is the first step on your road to financial recovery.