Blotches on your credit report cost you.

Don't despair. It's never too late to become creditworthy.

Improving your credit To improve your credit rating, just get started, and remember that it won't happen overnight.

5 steps to follow 1. Order your credit reports. 2. Examine your reports carefully. 3. Double-D strategy -- dispute and document. 4. Solve and dissolve debt. 5. Add stability to your credit file.

1. Order your credit reports.
Find out what the top three credit bureaus -- Equifax, TransUnion and Experian -- are saying about you. It's likely that they're all slightly different.

Yes, different! Creditors don't have to report to all three credit bureaus, so they typically report to the credit bureau to which they also subscribe.

Useful phone numbers and addresses:

• Federal Trade Commission consumer response center (877) 382-4357 • Equifax P.O. Box 74024, Atlanta, GA 30374-0241 (800) 685-1111 • Experian (formerly TRW) P.O. Box 2104, Allen, TX 75013-0949 (888) 397-3742 • TransUnion Corp. 760 W. Sproul Rd., Springfield, PA 19064-0390 (800) 888-4213

Time and money is wasted, says Steve Rhode, president and founder of Myvesta.org, if you only order a report from one credit bureau.

Thanks to a federal law, you are now entitled to one free credit report from each of these credit reporting agencies per year.

The reports will not automatically be sent out. Each consumer must request his or her reports one of these three ways: Go to annualcreditreport.com, which is the only authorized source for consumers to access their annual credit report online for free; call (877) 322-8228, or you may complete the form on the back of the Annual Credit Report Request brochure and mail it to Annual Credit Report Request Service, P.O. Box 105283, Atlanta, GA, 30348-5283.

One more caveat: You'll be able to order all three credit reports at one time or one at a time at different times throughout the year. It's your choice. But be sure to order from the centralized agency. If you go directly to the credit reporting agencies, you will be charged unless you fit another criterion for a free report.

The new ruling doesn't replace the other ways to receive a free credit report.

You're still entitled to a free credit report if: you've been denied credit, insurance or employment based on your credit report or you're applying for unemployment or receive public assistance. Also, if you currently reside in a state that already offers an annual free credit report from each credit reporting agency, you are entitled to the report. Georgia residents are entitled to two free annual credit reports from each credit reporting agency.

If not, you can order an extra credit report from each bureau for around $9.

2. Examine your reports carefully.
Nearly every consumer has an error on at least one credit report from one of the major credit bureaus, says Rhode. Credit bureaus generate your report on information they receive from your creditors, and they don't verify the information.