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Last updated: November 29, 2025
Key Takeaways
- Report Awareness: Regularly reviewing your full credit report helps you identify errors, track late payments, and understand the issues affecting your overall financial health.
- Error Disputes: Disputing inaccurate accounts or incorrect entries can quickly improve your
credit score once the bureaus verify the mistake and remove the faulty information. - Monitoring Habits: Using a credit monitoring tool helps you stay informed about score changes, track spending trends, and understand how specific financial decisions influence your credit.
- Budget Discipline: Maintaining a realistic budget prevents late payments and overspending, protects your credit standing, and helps you stay consistent with essential financial obligations.
- Smart Applications: Limiting credit applications reduces hard inquiries, preventing unnecessary score drops, and signaling stability to lenders evaluating your financial behavior.
A credit score is a number that follows you throughout your life. It changes and fluctuates based on your spending habits, debt obligations, and your level of responsibility toward those obligations. When you want to make a large purchase beyond your cash on hand, you discover how important a good credit score is.
If your credit score has suffered some beatings, there are things you can do to improve it. Everyone makes mistakes, and mistakes are forgivable over time. Take these steps to start improving your credit score immediately.
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Obtain Your Credit Report
The only way to know exactly what’s going on with your credit is to get a copy of your credit report. Your credit report shows how many late payments you’ve had in the last 7 years. It will also show any judgments and defaults against you. You may even find something in the report that doesn’t belong to you. If this is the case, you’ll want to get it removed. But first, you have to get a copy of the report.
You are entitled to a credit score check, and it is available to you at no cost once a year. The report will include reporting from the three major credit bureaus. This is important because not all three reports will be exactly alike. What shows up on one may not show up on another. Because of this, your score will differ slightly across the bureaus.
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If You Find an Error
It’s not uncommon to find mistakes in your report. If you find an error on your credit report, such as an account that doesn’t belong to you, you can contest that charge. Go to the website of the credit bureau that is reporting the error. There you will find instructions for disputing a report.
Usually, you will need to send a letter identifying the incorrect account and requesting that it be removed. The credit bureau will investigate, and if they can verify it was a mistake, they will remove it. It’s a little effort for a potentially significant change to your score.
Enroll in a Credit Monitor
Your bank or credit card company likely offers a free credit monitor. If not, you can sign up for a free CreditWise account from Capital One. The benefit of using your existing bank or credit card company is that you can check your credit while you’re on the site, managing your account.
Enrolling in a credit monitoring service will help keep you informed about how well you’re managing your credit. It will also show you how your habits are impacting your score, and it can predict how your score would change if you changed certain habits. It may sound like a lot of involvement, but it’s well worth the time you put into it.
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Maintain a Budget
Everyone should maintain a budget. Whether your
This will give you a good idea of how much extra you have for entertainment and dining out, so you don’t go over. If you go over, you risk not being able to pay your bills, and if you can’t, it will be reported on your credit report.
What you really want to avoid with your bills is being over 30 days late. Every time you’re even a day over 30 days late, you get a red mark on your credit score.
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Applying for Credit
You want to avoid applying for credit too often. Every time there is an inquiry on your credit report, this could lower your score. If there are numerous inquiries, it will negatively affect your score. These are called hard pulls, and you have to agree to them before they can happen.
The reason they adversely affect your credit is that if you are desperately seeking credit, then it’s a sign of financial trouble. A company that extends credit wants to extend it to someone who is financially stable.
Hard inquiries stay on your credit report for two years, so every time a lender looks at your application, they can see how many times you’ve applied for credit. Be wary of appearing desperate. The impact hard inquiries have on your credit does lessen as they age.
If you haven’t requested that a company extend credit to you, there shouldn’t be any inquiries showing up on your report. If there are, you can dispute these just like you can dispute an
There is also a soft inquiry. Soft inquiries are usually used for pre-approvals and do not affect your
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Watch Your Credit Utilization
If you have credit cards and lines of credit, you have a credit utilization record. Your utilization compares how much you owe to how much credit you have available. If you owe as much as you have available, then you’ll have a high credit utilization rate.
You want to keep your utilization low. This shows you are responsible for paying off your card balances, but it also accounts for about 30% of your total
Managing your credit isn’t difficult. You can use credit card solutions that can help you manage your finances. It just requires that you act like a responsible adult. All debts you’ve incurred are your responsibility, and if you signed a note promising to pay those notes in an agreed-upon time frame, then the lender is going to hold you to it. If you struggle with paying your bills on time, use a budget. You should be using one anyway. Not many people can get through life without knowing their spending limits.
It is essential to have excellent credit in today’s credit-driven world. Whether you want to buy a new home, a new car, or save money, it all boils down to your credit score. Unfortunately, most people learn the hard way about credit.
Mark Fiebert is a former finance executive who hired and managed dozens of professionals during his 30-plus-year career. He now shares expert job search, resume, and career advice on CareerAlley.com.
