Most people find out that their credit rating is not what they thought the hard way.  It happen when they are denied a loan, are unable to get the best interest rate, have to have a larger than normal deposit on utilities, or get denied a job.  By the time they find out it is too late as the damage has been done.  This means that the companies that issue credit ratings can alter your future.  In the US there are 3 companies that are used.  These are Equifax, Experian, and TransUnion.  Because of this, it is important to know what they are reporting in order to improve your credit rating.

The first step is to get a copy of your credit reports.  Under federal law they are required to, upon request, provide you with one free report per year.  It is important  to get one from each of the 3 companies.  Although they might all be the same sometimes items will show up one one report but not the others.  Having all 3 reports will give you the full picture.

Now that you have them, what do you do with them?  First, you will want to check them all for accuracy.  This might be where you learn that you are the victim of identity theft.  If you find out you are you will need to go about fixing it.  It is not too hard but it is time consuming and frustrating.  Next, you will need to check for accuracy.  If you find that some thing is wrong it can be removed by proving it was wrong or at least have it noted on the report followed with an explanation.  Finally, look for forgotten debts and pay them off.  It might only be $20 in late fees at the video store but it is still an unpaid debt.  Pay it and make sure the debt is marked paid.

You should repeat this process once a year (when the reports are free) or sooner if you have reason to believe there is a problem on the reports you need to address.  Simply going through your credit report is the most important step to improving your credit rating.