Is your credit gasping for breath, limping along… or worse? A lousy credit score can increase your interest rate, swell your monthly payments, or even prevent you from getting a new home. If you need to give your’s a little first aid, here are the steps you need to get your credit on the road to great health!

The first thing to do to improve your credit is to stop using credit as much as you can while you conduct an honest credit assessment. So, put your credit cards in your desk drawer and give them a rest. It’s like tossing out the chips and cake before you go to the gym to get back in shape.

Second, get a copy of your credit report. The easiest way to get a copy of your report is to go to the Federal Trade Commission (FTC) website and request one. You’re entitled to a free report once a year.

Using this service, instead of one of the many companies advertising on television or on the web, will keep you off the email lists of the professional credit repair companies. Once you’ve gotten your credit report, make a copy and look over it very carefully. You may be surprised at how good it looks. Circle any account or payment information that doesn’t look right. There may be late payments that you didn’t know about, there may be a charge-off on your report, or there may be accounts that you thought went into collection but didn’t. Credit reports are funny things, and sometimes entries you think shouldn’t be on them will be, and there may be something you thought would be on them that are not! Next, get your credit reports from all three major credit bureaus (Equifax, Experian, TransUnion). Contact each and request a copy of your report. Compare them. You’ll probably notice that they’re not all the same. One may have an entry on it that is missing on another report. This anomaly occurs because all creditors do not always report to all three credit bureaus. However, just because one entry isn’t listed on all three reports, doesn’t mean you can ignore it. Any bank or mortgage company you contact for a new home loan will certainly get your credit report from all three bureaus.

Your next step is to prioritize the issues on the report and determine which you want to address first. If your credit is good and you want to make it better, you may decide to go on a debt reduction plan by paying your credit cards down to between 20%-30% of your limit. This will not only improve your credit rating but allow you to purchase a better home at a much better interest rate. If you have good credit, but only one or two accounts, you may want to get another credit card to show another lender on your account to show your lender that you’re responsible with a few different credit accounts. If your credit is good, but you’ve got a couple of late payments on it, you’ll want to send an inquiry to the credit bureau regarding these late pays, challenge them and request that they are taken off your report. Getting any late payments off your account will immediately improve your score. Doing any of these things will have an immediate, beneficial impact on your score.

If your credit is less than stellar and you’ve got several issues with it, you’ll want to focus on those things that you can improve and ignore the things you can’t change. You only have so much time, and money to devote to this, so prioritizing your actions is a critical step. If you have charge-offs on your account, first look at the first date of delinquency to determine how old the charge off is, and when the charge off will automatically be removed from your report. All unpaid debts (with the exception of some student loans and bankruptcy) are removed from your credit report after seven years. If, however, you make a single payment at any time, the seven-year “reporting clock” starts ticking all over again from the date of that payment. In some cases, ignoring a debt that is nearing the time when it will be removed from your report may be the best way to improve your score. Once the debt is off your report, your credit rating will improve. So, if you do have a charge off on your credit report, and it is 5 years old, it will be removed in 2 years, so waiting may be your best course of action. If you’ve got late payments on your report, you’ll immediately want to challenge these with letters to the credit bureaus. They, in turn, will have to verify them with the credit-issuing institutions and, if those records no longer exist, they’ll have to remove the late payments from your report. You should challenge every single reported late payment that is reported. And if you don’t hear back from the institution, you should immediately request that the item is removed from your report. This is a tedious process, but it usually will work to get several of your late pays off your credit report.

Finally, if you have poor credit but still have a card or two, look at the interest rate that you’re paying on them. It’s probably very high. Each time you’re late with a payment, your credit card company will increase your interest rate. If you’ve been late several times, you’re paying a very high rate. Stop using this card immediately. If you have a lump sum of money, you may want to get a secured card with a more reasonable rate and transfer your balance on the high interest rate card to the secured card. Get the balance on the high interest rate down to a small amount and only use that card as a tool to improve your credit. You can also request that the credit card company lower your interest rate on that card. Often times they’ll do this to keep you as a customer. If they won’t, and you need to keep that card, do it, but only use it sparingly to keep a positive credit record with it.

Using these first steps will make your good credit better, and immediately stop your poor credit from getting worse. Fixing your credit can take a little time, and will require some discipline and effort, but if you do it effectively, you could save thousands of dollars on your home, lower your payment, and get the home of your dreams!