How to Improve Your Credit Score

As banks grow picky, now is the time to check your report—and fix any mistakes.

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With banks increasingly picky about giving out loans, now is the perfect time to boost your credit score. Anyone with a 720 or above will have a much easier—and cheaper—time borrowing money. Because few people go to the trouble of getting their credit reports, they often don't even realize there are mistakes until it's too late, when they're sitting across the table from a reluctant loan officer.

But going from a 600 to 800 isn't always easy. I recently heard from Ann, a 65-year-old from San Antonio. She said that she had tried correcting errors on her own credit report—including asking for the removal of addresses and names that she has never had—but found it very difficult to get the credit bureaus to remove those mistakes.

Here are some tips to make sure your credit report is accurate:

• Get an annual checkup. Obtain a copy of your credit report—it's free once a year—at AnnualCreditReport.com. You have to pay to obtain your actual score, but getting the report alone will allow you to check for mistakes.

• Fix errors. Credit bureaus are required to correct errors by law. If you see a mistake, contact them, either through their website, over the phone, or by letter, to explain what's wrong. The Federal Trade Commission recommends including copies of any documents that support your position as well as the copy of the report itself, with the errors circled. The FTC offers a sample dispute letter on its website.

• Maintain a paper trail. Keep copies of everything you send to the bureaus, and request a return receipt at the post office so you know they received your mail.

• Beware of credit-improvement scams. Dozens of companies offer to help you improve your credit score for a fee. I recommend staying away from them, because improving your score involves a pretty basic technique: Pay all your bills on time, stay well under your credit limits, and keep accounts in good standing over many years.

Have you ever had trouble correcting a credit report? Please share your story below.