1. Request your free credit report





The first thing that you need to do to use your credit report wisely is obviously to request your credit report. To get the best perspective on your overall credit, you'll want to select a 3-in-1 report that features details from Experian, TransUnion, and Equifax. A great place to select your free credit report is ImmediateCreditReports.com, which features a fast online credit request.





2. Verify and Update your Contact Information





Once you've received your credit report, you'll notice that it actually contains quite a bit of detail about what companies you do business with, as well as your relevant contact information. The first thing you should verify when you receive your report is your contact information. Over the years, as you move from one place to the next, your creditors may not have your latest information, meaning important financial documents may be going to your old addresses, and falling in to the hands of strangers. If you notice that your current address is not accurate, contact the bureaus immediately. You'll be provided with a transaction number when you receive your credit report, which will allow you to quickly correspond with the bureaus.

Don't be surprised either if your information is correct on one or two of the reports but not all three. The bureaus don't always communicate with each other. If you find correct info from one reporting bureau but not the other ones, don't assume they'll correct each other. Take action.





3. Double-check credit inquiries





In today's age of identity theft, it can be extremely important that you know who is asking questions about your credit. Within your report is a section outlining what companies have placed inquiries in to your credit. Most will be the standard fare – employers, banks, and credit companies. However, if you notice inquiries from companies that you've never heard of, make sure to contact them right away. This could be an early warning sign that your identity has fallen in to the hands of thieves, and will require that you take swift action to protect yourself.





4. Review all your credit accounts





Once you've verified that your credit inquiries make sense, you're going to need to start pouring through your outstanding and closed credit accounts. There are basically 3 types of accounts – open, closed, and collecting. Make sure that all the accounts that you've closed in the last 7 years are reflected correctly. In some instances, individuals find they have accounts open and running long after they thought they were closed.





5. Calculate your revolving debt





Most credit experts advise that you maintain approximately 40% of your available credit as a revolving balance to achieve the greatest score. This means, for instance, that if you have $2,000 of available credit, that you maintain about $800 of balances in your accounts. Obviously, you want to make your regular payments, but by staying around the 40% mark, you will maximize your credit score and prove you're capable of managing your finances. If you're way under or over, it may be time to adjust your spending.





6. Prioritize your payments





Now that you've got a grasp on where you stand, you'll want to prioritize the payments that you do have to make. Again, in your revolving accounts you want to reach that 40% revolving balance to get the best credit score improvement. If you have certain accounts that are higher interest than others, focus on paying those down first (to maximize your returns). If you have any accounts in collections, move those to the top of your list.





7. Negotiate accounts in collections





While this may not apply to everyone reading this article, if you do have accounts in collections, make sure to contact those agencies are request reduced payments, new payment schedules, or anything else that you're able to offer. These collection agencies purchased your debt for pennies on the dollar, so the prospect of a payment in return is usually appealing to them (even if you cannot pay the full amount). Be courteous and patient.





8. Develop your dream goals





What good is great credit if you're not sure how to use it? With all your credit information handy, and a plan of action for how to correct any outstanding issues, it's now time to determine your goals for your credit. Do you want to buy a home, a car, finance a new business? Keep your goals in mind when working with your credit so that you will know when you're ready to take action.





9. Get your credit score





Your credit report is extremely valuable in providing you concrete information about your current financial situation, but your score can give you a quick idea of where you stand. Just like with your report, the best credit score is a combined 3-in-1 score from all three of the bureaus. Your score will be between 350 and 850, and should give you an idea of what offers you may be inclined to use (such as credit cards or large loans).





10. Set up a credit monitoring service





Finally, setting up a credit monitoring service, like the one that you can get at ImmediateCreditReports.com, is a great way to ensure that your future credit picture keeps getting better. A monitoring and alert service can keep you informed of changes to your score and updates as you pay off accounts or open new ones. This is especially important to continue your fight against identity theft as well.