Improve Your Grade

Now that you have what is essentially your credit management report card, look for ways to boost your grade. Make sure that the information in the report is accurate. Do you recognize all of the accounts listed? Sometimes information from someone with a similar name may end up in your file. For instance, Robert Downey may find accounts on his report that belong to Robert Downey Jr. If you've ever had your wallet stolen, pay extra attention. "Smart identity thieves will open an account in your name and pay on it reliably before they start using it fraudulently," says Craig Watts, public affairs manager for the Fair Isaac Corporation. If you see an unfamiliar account, call the creditor right away.

If you're in a dispute over a charge, bear in mind that it may show up on your report as being paid late or not at all, a factor that can damage your FICO score. For instance, Wall once had problems getting a mortgage because she was disputing a charge for returned merchandise.

Next, check to see if your report contains four two-digit codes. These "reason codes" explain why your score isn't higher, says Snyder. For example, you may need to improve your mix of credit by adding a major credit card to a file containing mainly department store cards. Perhaps you are maxing out your limits. "If you have $10,000 in credit and are using $9,000, you can improve your score by paying down your debt," says Watts. Sometimes you have to let time pass for your score to improve. Mistakes such as paying late stay on your report for seven years. "But the older the information, generally the less damaging it is," says Gerri Detweiler, author of The Ultimate Credit Handbook: How to Cut Your Debt and Have a Lifetime of Great Credit (Plume, 2003).

If you're in serious trouble -- with bankruptcy, a tax lien, or judgment -- you can write a 100-word statement that the credit bureaus will include in the report. "You can say, 'I was going through a divorce and my ex was supposed to pay the bills but did not,'" says Wall. Snyder feels lenders rarely if ever give such statements the consideration they deserve anymore, but it certainly can't hurt to try.

Divorce, incidentally, is one the biggest causes of credit problems. A judge may state that your ex-spouse is responsible for half of the Visa bill, but if your name is on the account, beware.

"You still have a contract with the creditor and the divorce decree has nothing to do with that," warns Maxine Sweet, vice president of consumer education for Experian. If you can't pay off all joint accounts immediately, Sweet's advice is for both parties to take out personal consolidation loans to pay off debts. "That totally breaks your tie to your ex," she explains.