#1 - Dispute Any Errors On Your Credit Report

There are 3 major credit bureaus - TransUnion, Equifax and Experian - that keep track of your credit history. By law, you are entitled to receive one free report each year with all the information they have about you.

You should use this opportunity to go through your report and look for any errors. This could include overdue payments that have in fact been paid, loans or other debts that have been paid off but are still showing as active, and other such errors.

If you find any errors, contact the credit bureau by registered mail and ask that the error be investigated or removed. If they cannot prove that it is correct, by law they have to remove it from your credit report.

You can get your annual free credit report through the website www.annualcreditreport.com which has been set up by the 3 major credit agencies and the FCC.

#2 - Add A Note To Your Credit Report For Other Problems

If there is a problem on your credit report that is not an error but there was a legitimate reason for it, you can request that a note be added to your report explaining the situation.

For example, if you were doing some renovations and a contractor didn't finish a job properly, you may refuse payment. This non-payment would still show on your credit report however.

Not all lenders will pay any attention to your notes, but it's a better solution than simply leaving the black mark with no further explanation.

#3 - Hard vs. Soft Inquiries

Having too many inquiries made on your credit report can negatively affect your credit score. Pulling your own report to check it for accuracy is considered a "soft" inquiry and will not have any dramatic effect on your rating.

When lenders pull your credit report for a loan application or other reason, it is considered a "hard" inquiry. These are the types of inquiries that should not be done too often as they can lower your score.