Bad credit affects more aspects of your life than just the limit on your credit cards. Many landlords will run a credit check as part of the rental process. Employers in many industries check FICO scores as part of their due diligence before hiring a new employee. Some insurance companies look at credit when determining rates for car and homeowner’s insurance. Repairing bad credit can be a long process, but is an important one. Accessing your credit report and score can be a valuable tool when beginning the process of credit repair.

The first step in credit repair is to acquire your full credit report. A free credit report can be accessed annually through the Federal Trade Commission or through a number of websites. The credit report includes a list of debts, such as open credit cards and car loans. In the credit repair process, reading your credit report carefully is extremely important. The report should show all open accounts and all debts from the past seven years, or ten years for a bankruptcy.

In reviewing your report, if you see any accounts that you think should not be on the report, you can dispute the information with the creditor. To dispute an account, send a letter to the creditor along with a copy of the error, circled on your credit report and copies of any documentation you have to support your claim, such as payment records or receipts. Be sure to keep the original supporting paperwork for your own files.

The items on your credit report all help determine your FICO score but may not include the score itself. FICO scores range from 300 to 850, and determine your creditworthiness–the chance that you are going to repay your debts. Of the components factoring into the FICO score, the most important is your payment history. Making payments late will lower your score, wherein paying on time will make it higher.

The second factor is credit utilization. This looks at the outstanding balance of revolving credit compared to the amount of credit approved. Having a high balance to limit ratio is likely to adversely affect your FICO score.

The next factor is the length of your credit history. Having a long history positively affects your score. Keep in mind with this facet is that once a credit card account is closed or charged off, that line of credit no longer counts in determining the length of your history.

Also factoring into the FICO score is the diversity of credit types. There are four major types of credit—mortgage, revolving credit, consumer financing, and installment. Mortgages are loan secured against real property. Installment credit refers loans that have a fixed amount attached, such as student. Revolving usually refers to credit cards, where there isn’t a fixed amount to pay, just an ebb and flow of funds up to the credit limit established by the lender. Consumer financing encompasses many of the previous types of credit, but generally refers to money borrowed for retail purposes.

A final determinate part of the FICO score is the credit inquiry. Many people are unaware that each time one’s credit report is accessed by a potential creditor; it may show up as a negative mark on your credit report. One marked exception to this is when one is “shopping around” for a type of loan, usually a mortgage. Seeing multiple checks of the your credit report by the same type of creditor in a short span of time would not affect a credit score the same way as multiple attempts to open store brand credit cards.