Credit reports are extremely important for your financial well being as they will surely be considered each time you get a car loan, mortgage or credit card.

The application process requires a complete review of your credit report and most importantly, your FICO score. You might not give this number much attention but for lenders, it is the biggest determining factor that helps them decide whether you are eligible for creditor not,for the what interest rate you will receive.

Thus in order to increase your chances of receiving the loan or credit card, you will have to maintain the highest FICO score possible, which is possible if you follow the following steps.

1. Go through your credit report when applying for a new loan or credit card. Check for any type of errors or incorrect information.

2. Make sure that you pay all of your bills on time. If you are lagging behind on some, then pay them up immediately

3. Check with your creditors to make some payment plans if necessary. Most creditors will be willing to work with you in order to schedule a plan that suits you as well, after knowing about your information. You may even get a lower interest rate or reduce your balance.

4. Emphasize on paying down your debt first. Make your credit cards below 50 percent of your limit; just by doing this, you can boost up your score by as much as 100 points.

5. 5Don’t close any of your accounts. Even if you are unable to pay the entire amount you owe, try to keep the account open with a zero balance.

6. Avoid opening any new credit accounts, until you get to an acceptable score. Applying for any new type of credit or debt will affect your score.

7. If possible, pay off any accounts in collections. However, remember to negotiate the payment before paying anything. Once you pay the balance in full, make sure the account is removed from your credit report. And if you fail to pay, it will remain on your credit history for 7 years, regardless of whether or not it is paid. Also, avoid using credit cards as much as you can. Pay using cash or debit card to increase your credit score.

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