Changing bad habits when it comes to cleaning up your credit report is your first step in improving your credit score for the long term.

Practice being punctual. Pay your bills before the due date, as your payment history from this date forward will probably be the most important factor in raising your FICO credit score. There are many automatic bill pay options available where your monthly bills are electronically drafted on the date you set. If you think you will miss a payment, it's often better to borrow the money from elsewhere rather than damaging your credit rebuilding program.

Pay down debt according to your own situation. Credit scoring systems rank you by the percentage of debt you carry on a revolving credit card. Or more simply put, if your have a $2000 credit line on four credit cards, and your average balance on each is $1900, then your FICO credit score will be affected negatively. You might have never missed a payment, but by carrying a 95%-debt-to-credit-limit ratio, might lower your credit score. Experts recommend paying down the highest card balance that is approaching your credit limit first, then tackling the next, then the next. It's also wise to target the cards with the highest interest rates or the highest fees first.

Limit credit inquiries. You can pull your own credit report and you don't affect your overall credit score; but when anyone else checks your credit, a "credit inquiry" is registered. Too many inquiries equals a lowering of your credit score, often knocking 5 points off your FICO score. The good news, though, is that if several inquiries are made within, say, a 30 day window (such as might happen when you are comparing different home loans from different lenders), this is not viewed as adversely as if you are constantly applying for new charge cards or credit cards from intro offers that you get in the mail.

Consider all options. Switch acco

unts, moving one credit card balance to another credit card and then closing that account. Consider a home equity loan to pay off all credit cards, close the accounts, and pay off the balances over a longer period of time. Be careful not to fall back into the credit card trap after a few months, though, or you'll wind up running up high balances and still be stuck with a home equity loan monthly payment, and you'll have exhausted your hard-earned home equity.

Eliminate credit exposure. Choose credit selectively. Once you've paid off a credit card account, close it (especially if you haven't had the account for a long time. Longer held credit card use helps exhibit long-term good credit habits to potential future lenders). Too many open accounts have been known to lower a credit score. Cut up unused cards. Write to the credit card company, tell then you wish to close the account and specifically request that they note the account "Closed by consumer." You don't want to give the impression that the credit card issuer initiated the action, because this could be seen as a negative in the eyes of other lenders.

While you cannot erase or hide negative information in your credit files that is correct, you can remove errors from your credit report, and you can develop good habits to fix your credit for good and restore sound financial stability in the years ahead. It will take time and focus, but anyone who is committed to improving their credit can do it themselves.

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