Poor credit affects millions of Americans, especially now in these tough economic times. The toll that bad credit can take on many people can be quite profound. Getting a mortgage for a new home can be near impossible. Applications are likely to be turned down for new credit cards, new cars, and many other types of personal loans. Today more than ever it's easy to find a wealth of resources thanks to the Internet. Fixing bad credit to increase your score is not only vitally important but in most cases not that difficult.

So where do you start?

Before you can start fixing your credit you first need to know where you stand. The first step is to obtain your credit reports for free by calling 1-877-322-8228 or visiting AnnualCreditReport.com. By law you are entitled to one free copy of your credit report from the three main bureaus per year under the Fair Credit Reporting Act or FCRA. Experian, Equifax, and TransUnion must comply with the FCRA.

Once you've received your credit reports take a close look at them. Try to identify any inaccurate or fraudulent items. This is one of the only activities that you can use to increase your credit score that deals with your past. This process can be handled completely on your own or with the help of a credit repair service. Disputing these old items and having them corrected or removed can boost your score.

Well that's all in the past, what happens from here out?

As stated before other than removing inaccurate items your past is just that, in the past. It's counterproductive to worry about what you've already done. Far too often people receive their credit scores and just resign themselves based on their low credit ratings. The key to building good credit is to work on the present and begin building good habits.

• If you've gone and maxed out your credit cards now is a good time to start paying them down. It's a good idea to keep the cards open but try to bring your balances down to around 60 to 70% of your limit. This range is a good balance between using credit and abusing credit.
• If you know you're going to be late or are having trouble paying the bills at all please contact your creditors. Many have special arrangements that can lower your interest rates or bring down your monthly payment. These are generally temporary but they will give you time to get back on your feet. Just ignoring the bill will only add interest and late fees which will compound making the problem worse.
• The Truth in Lending Act or TILA requires that all lenders disclose all terms of the agreement before you sign. Yes this is the fine print that many people skim over. And yes it can be very boring, and very confusing at times because of the wording. Honestly you do need to read this information and understand it. If you can't understand it find someone that can. They cannot change the terms of an agreement but they can execute anything you sign to in the original agreement.
• Be responsible with credit cards. If possible use your credit cards consistently but keep the balances low or paid off. Do not close your card; just use it for purchases here and there that can pay for when the bill arrives.
• One of the most important pieces of advice when it comes to increasing your credit score is very simple; pay your bills on time. Most creditors report monthly to the bureaus. Late payments not only assess fees but they also damage your scores.

If you start using the tips listed above you will see your credit score increase. Remember that while your credit past is important you need to focus on your future. If the process of disputing your pass items is too involved consider a professional credit repair service. They can take care of what you've done while you focus on what you should be doing.