Putting credit problems behind you – here's the game-plan

Determine your starting point – you won't know what parts of your credit profile need help if you don't know where you're starting from. This is as easy as checking your credit report and FICO score to understand which areas need improvement.

Educate yourself – knowing your starting point is fine, but what you really need is the knowledge to move forward with managing your credit wisely – which will ultimately help your FICO score. This free booklet called Understand Your FICO Scores is a great place to start.

Set an improvement plan – after you check your report and score and have identified your problem areas, focus on changing your credit behavior in those areas. For example, if you determined that the balances on your credit cards are too high, set a plan to pay down your balances.

Keep tabs on your credit – don't just assume that your plan is working, make sure it is! Check your credit every so often (probably a few times throughout the year) to see if your actions are having the desired effect. At least 6 months before applying for your home loan next year, get your credit report and score so you know what rates you can expect – and also to know if you should wait until your score improves more.