If you need to improve your credit, make sure to first find out your actual score. By law, every citizen can get a free copy of their credit report every year. On this report you'll find your credit history. You'll also find a report on how well you paid your debts.

Your credit report will also report who and where you owe money, the amount owed and whether or not you paid your bills on time. This information is what lenders will use to analyze your credit.

The information on your credit report is used to give each person a number, or credit score. Your number is a reflection of what condition your credit is in. Lenders look at your number and that tells them if they should give you a loan or grant you credit based on your previous ability to pay back money you have borrowed.

Well, there you go, the simple explanation for credit reports. In reality, there's a lot more going on in the process. But, for the most part, you will only need to know your credit score and what's on your credit report. You should make it a point to learn how to read and understand credit reports so you can see if there are any mistakes that you need to have fixed in order to raise your score.

Now that you know in a nutshell what a credit report is, the next thing is to know where to get yours for free. Remember, every American gets one free credit report every year, and there are three major reporting agencies that you an go to for yours. The three most well known agencies are Equifax, Experian and TransUnion.

The reporting agencies will ask you some personal questions in order to prove you are the person on the report. Once they prove you're you, your free report will be available for reading on your computer. You can then either view it or print it out for your records.

Although most people will only need one report each year, for those folks who are truly in need of repairing their credit and raising their scores, financial advisors recommend getting a report from each of the three major reporting agencies and examining what each contains. Some reports may differ from others depending on who the lenders report to. Remember too, that you only get one free report each year, so you'll have to pay a small amount to get the other two reports. Creditors do not have to report your payment history to any agencies at all, it's completely voluntary on their part, so you may be surprised what you find from one credit report agencies report to another.

Don't feel like it's the end of the world if your credit score is currently lower than what you desire. Humans make mistakes and now days have the resources to make repairs. Once you know that you've made bad spending choices that have damaged your credit, then take the steps required and raise your credit score.