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You’ll want to be sure your credit is in the best shape possible before you apply for a car loan, home loan or personal loan. But how do you get ready for a credit check?

A lender checks your credit before approving you for a loan and your credit rating also determines what kind of interest rate you will pay on a loan. The lifetime cost of a bad credit score is staggering — here’s a calculator to help you crunch the numbers.

These three steps can help ensure your credit profile looks as good as it can — and isn’t dragged down by inaccurate information.

1. Check Your Credit Report

Get a free copy of your credit report, guaranteed by federal law, from each of the three national credit reporting agencies, Equifax, Experian and TransUnion by visiting AnnualCreditReport.com.

Check to make sure you recognize the accounts on each copy of your credit report. A mixup or wrong keystroke could result in someone else’s loan appearing on your report, which in turn could hurt your chances of being approved for a loan.

If you find mistakes on your credit report, dispute them. You want your credit profile to be error-free before a potential lender runs a credit check.

2. Check Your Credit Score

Many credit card companies and other financial institutions are starting to offer a credit score for free every month to cardholders. You can also get two credit scores for free every month on Credit.com, plus an explanation of the factors affecting your score. You have to know where your credit scores stand so you can make a plan to improve them.

Requesting your own credit report or credit scores does not hurt your credit scores. But hard inquiries — the term for when a lender checks your credit report — will ding your score a bit.

3. Do the Work

The best way to improve your credit scores is to pay your bills on time.That’s because payment history is the largest factor weighed in your credit score. Paying late or missing a payment will hurt your score, so get a plan for paying your credit accounts on time each and every month and stick with it.

Looking for a quick fix? The amount of debt  you owe relative to your credit limits can also significantly affect your scores. If your balances on any credit card accounts are higher than 20% to 25% of your available credit, consider paying them down. If you can get a high “debt usage” down to less than 10% by paying down those balances, you may see a quick pop in your credit scores.

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