Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Nov 9, 2011

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When it comes to obtaining the best possible loan price, nothing matters more than an individual’s credit score. In order to acquire the most amount of money for the least amount of payment, you will need to watch and nurture your credit score.


Some have great credit while others would rather deny its existence altogether. There is good news, though: You can always work toward improving your credit score.

The Credit Report

In order to begin this process, your first step should be to obtain your credit report. According to the Free File Disclosure Rile of the Fair and Accurate Credit Transactions Act, the three major credit reporting companies are required to provide you with a free credit report every year if requested.

The Federal Trade Commission (FTC) recommends using the website to obtain your free report.

Confirm the Report’s Accuracy

After acquiring your credit report, review it carefully to make sure the information is accurate. The Fair Credit Reporting Act requires all credit reporting bureaus to correct discrepancies, such as incorrect or incomplete information on an individual’s report.

If you notice inaccuracies, make copies of your documents (always keep originals for yourself) and inform the credit reporting company of your findings in writing. Explain in detail why you believe the information is incorrect and request it be deleted from your report. Finally, send your mail with a return receipt request, so you can be assured your delivered mail was received.

You should expect a response from the credit reporting companies within 30 days.

If the credit bureau agrees and identifies an inconsistency on your report, they will remove it from your record. If the negative information was not deemed inaccurate, then your report will retain that negative information for 7 to 10 years, depending on what kind of infraction it was.

Deal With Your Debt

After obtaining your credit score and ensuring the bureaus’ report on your score is accurate, you can start making necessary changes to your financial routine in order to enhance your financial credibility.

One of the largest factors that negatively impact a person’s credit score is the inability to pay bills on time, so that should take top priority.

Paying bills on time not only will help your credit score but also will help relieve you of any outstanding debt—another enormous factor that negatively affects your credit score.

Develop a budget by writing down your monthly income, expenditures and bills. Then go through your expenditures and cut out anything that is not absolutely necessary. Hard as it may be, relieving yourself of debt’s looming weight will be such a liberating and rewarding feeling—and it will put you in a position to add back on and enjoy all of those unnecessary expenditures in the future.

If after budgeting yourself still leaves you in slow and bad position, contact your lenders. While lenders operate a business, they are still people, and they understand personal hardship. Explaining your situation and talking to a live human being may not always work, but it can do wonders in some situations. Even if your payments are slightly reduced, anything helps.

Avoid Scams

Finally, avoid scams promising to help you with your credit problems. Those guaranteeing a credit fix, new credit identities or the removal of negative credit information from your report are offering promises they cannot keep. Rather, they deliver guarantees but insist on collecting a fee in advance. Companies that preemptively claim they will help you before looking into your specific situation are most likely simply fishing for money.

At best, you may receive a small boost in your credit score for a hefty price. At worst, you may lose hundreds that could have gone towards your existing debt.

In some of the most horrible cases, individuals have found their Social Security number stolen and used, which leads to an even deeper hole to try and climb out of.

The FICO credit score is not something set in stone. It fluctuates on a daily basis, and even the worst financial infractions are shed off your permanent credit record after a maximum of 10 years. Never lose hope in your financial credibility, but instead work to better your score and prove FICO’s representation of you wrong.