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As you have read, your credit report will dictate whether or not you are able to get new credit. But it doesn't stop there. Your credit report (or score) will also have a large impact on the interest you are charged on any credit you are able to get. As an example of this, you might be able to get a mortgage with a poor credit score but your interest rate would likely be 2% or even 2 1/2% higher than if you had a good or excellent credit score. Insurance companies are now routinely checking credit reports when they calculate your premiums. And as noted above, you might not get a new job or be passed over for a promotion based on your credit report.
How to get your credit reports
You can get your credit reports free by contacting the three credit reporting bureaus individually. However, a simpler solution is to get all three simultaneously at the website www.annualcreditreport.com. These reports are free but only once a year. If you want to get your credit report more frequently than annually, you will need to contact one or all of the credit bureaus and pay for your report.
How to increase your credit score
There is no magic secret for having a good credit score. You just need to use credit sensibly. This means making all of your payments on time and paying off your balances at the end of each month. Where most people get in trouble with debt is carrying balances forward from one month to the next. The reason for this is that when you carry balances forward, you incur interest charges that will be added to your balance due. If you're not careful this can spiral into a huge amount of debt in practically no time at all.