Have you seen that insanely annoying commercial where the guy goes, “I’m thinking of a number…..” and it shows a meter moving between the numbers of like 300 to 900? I don’t think I’ve ever watched it all the way through, but I know that they want you to check your credit report through their website.

But why should you check your credit report anyway? Well, if you’re thinking about buying a new house or a car in the next few years, you better start preparing now. And your first step should be to check your credit report. There’s no quicker way to be turned down for a loan or to be offered an exorbitant interest rate than to find out you have a bad credit score when you apply for the loan.

There are three credit report agencies out there: Experian, Equifax, and Transunion. They each independently evaluate your credit history and calculate your score. When you get your credit report, each of these reporting agencies will be on there showing your score as they measure it. Your score will be a three digit number reflecting your credit history (It’s that number between 300 and 900). And the loan officer will be looking at that number to determine if he or she should give you that loan.

So, how do you check your credit report? In order to get it for free, you want to go to http://www.annualcreditreport.com/. It is the ONLY site that the US government authorizes (Check here). Bear in mind, you can only check your credit report once a year to get it for free.

If you find that your credit score is less than favorable, chances are you goofed at some point on making a payment. Many times people don’t realize the harsh consequences of missing or even being late on a payment. Nothing will damage your credit standing quicker than these sort of mishaps, especially on loans like mortgages and car payments. So, in order to start repairing the damage, you have to start paying on time.

Some helpful tips to staying on top of those ghastly bills:

  • Make online payments or set up electronic bill paying. This will eliminate mailing delays and gives you the ability to better manage payment dates.
  • If you must pay by mail, I would suggest mailing your payment no later than a week before the due date.
  • No matter how you like to pay your bills, it’s always a good practice to enter all your bill due dates in your calendar or in your checkbook.