There are tons of published reports of successful people and CEOs of companies who had bad credit problems by the time they graduated from college, and some with bad credit problems even before they graduated from high school. At those times in your life, having the ability to purchase things with "free money" is almost irresistible, but it sets up a habit that is tough to break and starts to put your credit rating on a downward spiral that increases in speed until you reach rock bottom.

Your credit score is calculated by the credit bureaus. There are three major credit bureaus – Equifax, TransUnion and Experian. But since they do not share information between them, and because different creditors and lenders report to different agencies, your credit score is almost certainly different, depending on the credit report you get from which agency.

A "perfect" credit score in today's world is 850, but you typically only get that if you are a multi-millionaire, have a significant number of accounts, and have not been past due with a bill since birth. A "good" credit score is around 700 and the average credit score is around 650. A score of 650 or more would indicate stability, being employed, keeping your financial head above water, with perhaps a few problems in years past but nothing really major. A score under 600 would be considered having bad credit.

But unless you have a credit score that is in the "excellent" to "perfect" range, and ESPECIALLY if you have bad credit, there are steps you must take to get your credit score raised. I am not talking about underhanded or illegal or shady tactics, but I am talking about things that most consumers don't know or don't take action on.

For example, did you know that a bad credit score can cause you to have to pay more for your car insurance premiums, even if you have never filed a claim? Did you know that if you are applying for a new job, your credit score with many companies carries even more weight than your qualifications for the job? Did you know that your mortgage interest rate could be as much as a full percent lower with good credit, which causes your mortgage payment to be hundreds of dollars higher just because of the bad credit you had when you got the mortgage?

Obtaining and keeping your credit score as high as possible is not just a one-time thing that you do and then forget about it. It is something that takes constant care and feeding, and regularly checking over. Does that sound like too much trouble? Only if you don't mind paying more for car insurance and loans and mortgages than you need to, or if you don't care about getting that higher-paying new job.

Settle your debts if you have past due accounts. Almost all creditors will work with you to come up with a payment plan that you can live with. They realize that if your account needs to go to their collections department, chances are that they may not even get the full amount owed, so for the most part they are willing to work something out. But it is YOUR responsibility to contact them and indicate a willingness to work something out. You would be surprised at how receptive they are to that.

Get a secured Visa or MasterCard account. This is one where your credit limit is exactly how much you have on deposit with the issuer. Use the card and make timely payments, which will be positively reflected on your credit report.

Get a copy of your credit report from each of the three major credit bureaus and go over it with a fine tooth comb. Chances are better than excellent that there are errors on the report. It is your right and DUTY to file a dispute with the credit bureau to get the inaccurate information removed, and if that was negative information (which it almost always is when erroneous data is reported), that will raise your credit score.

Also watch in your credit reports for accounts that you do not know about. The crime of identity theft is one of the fastest growing crimes of this century, and virtually anyone can be a victim of it. If you see accounts on your credit report that you have no idea what they are or where they came from, dispute it, because that could be an indication that you are a target of identity theft. Feel free to visit our web site to get more information about Prevent Identity Theft.

You can turn a bad credit score into a good credit score, but it does not happen overnight. But with work and diligence, it can be done and you will reap the rewards.