Your personal credit score is important because a bad credit report will have an adverse effect on many areas of your life. It is not only loans that are affected, but also insurances and even employment. There are a number of steps you can take to improve your credit score but, before considering any of these positive actions, here are seven mistakes that you must avoid at all costs:

1. Using a business EIN number instead of your Social Security number when you apply for credit. This is illegal.

2. Using another person's SS number instead of your own. Here again this is illegal.

3. Creating a new credit identity using false information. Naturally this is illegal also and so could leave you open to prosecution for fraud.

4. Using the services of a company that promises to remove all adverse credit records and provide you with a perfect credit score. At best such offers are likely to be a scam where you pay your money and the company then disappears. At worst they will suggest that you take the steps listed in 1, 2 or 3 above which will involve you in ilegal acts and the possibility of prosecution.

5. Forgetting to check your credit report each year. The three credit reference agencies, Experian, Equifax and TransUnion are obliged by law to provide you with a free copy of your credit report upon request once every twelve months.

6. Failing to dispute any errors or incorrect information recorded in your credit reports. Mistakes can occur so you need to check your credit reports carefully to make sure that the information shown against your name is both accurate and up to date.

7. Making your monthly payments on time. Of the five factors that make up your credit score payment history is the most important accounting for 35% of the total. Now that you are making efforts to improve your score it is absolutely essential that you should make payments on time.

Avoid these seven mistakes and you will then have a firm foundation on which to build. The next stage is to take those positive steps that will over time enable you to rebuild your credit record and allow you to obtain the cards and loans that you desire.

Hugh Harris-Evans is an author and the webmaster of CreditCardCleanup.com where you will learn all you need to know about credit cards and how to keep out of trouble. http://www.creditcardcleanup.com