If you weren't aware of this fact then let me remind you that you are entitled to a free copy each year from each of the three major credit reporting bureaus. Just note that your free credit report will not contain your FICO score.

The three major credit bureaus (Equifax, Experian, and TransUnion) will be happy to sell you that piece of information, as will any number of other web sites. Shop around for the best deal, and don't get hooked into signing up for a monthly service.

Think of your credit score like grades you get on a test in school. The higher your score, the better your credit rating. FICO scores range from 300 to a perfect 850. Anything under 700 is in need of some improvement.

A higher credit score will get you a lower rate on your home loan meaning – A more affordable mortgage. Just think… A mere 2% reduction in the interest rate on a 30 year fixed mortgage for a $200,000 home could save you a whopping $100,000! Isn't that something to aim for?

More and more employers are checking your credit report when you apply for a job. While they may be getting the report to verify the information you put on your job application, what's to stop them from seeing how you handle your financial affairs? The term "credit reputation" can either be used synonymous to credit history or to credit score.

Some people who believe they have a bad credit report may seek out some professional help to repair a bad credit report. If your intended employment is relative to this area, your credit history is also a taken into account in making the decision whether or not to employ you.

A credit report also contains general information on how to build or improve credit history, and how to check for signs that identity theft has occurred. Crooks can go researching information about their victims in government registers, internet search engines, or public records search services etc.. If your identity is compromised, this potentially allows criminals access to personal information through credit-rating and data mining services. The tragic point of this is; the recipient of such vital information might attempt to retrieve money from your accounts. They even go so far as to use collection agencies!!

In most cases the reason why you got your credit report and want to improve your credit score is that you want a loan. Well bear the following point in mind:

The consequence of a negative credit rating is typically a reduction in the likelihood that a lender will approve an application for credit under favorable terms, if at all.

Lenders will be more likely to approve a loan with a 15% or 20% down payment, rather than a loan that is more than 90% financed. If your private financing source has sufficient funds to provide you with a decent down payment then do so.

Lenders look for stability. When you're starting out, you'll probably move home quite frequently and may not have a long employment history but you can register to vote at your current address. Why? Because lenders use the electoral roll to check that you are who you say you are and live where you claim to live.

You're required to put down a deposit on whatever you purchase, and the remaining balance is financed on the card. Pick the method that is best suited for your bad credit problem, and enjoy the financial advantages that an improved credit report will bring.