When banks, credit card companies and other lending institutions make offers or even turn down applications, they aren’t using magic to guide their decision making. Instead, they rely on a person’s credit history, current income versus debt and overall track record of making stable choices. To find out what they are going to see in advance of an application, you need to get your hands on a free credit report.

Free credit reports are provided by the major credit bureaus one time a year to individual consumers. A credit report is essential for giving you a leg up on knowing what type of loan or offer you might be eligible for. If you discover your credit is in great shape, for example, you might be able to take your time and compare credit cards for the best possible offer.

Should you find a history that’s blemished and needs some work to improve, there will still be options open to you. If your credit report looks bad, work on fixing it by:

Requesting that errors be corrected – This is perhaps the biggest reason to pull your own credit report. Mistakes are sometimes recorded that can hurt you when it’s time to borrow. A free credit report will let you see the mistakes and put you on the path for getting them corrected.

Paying down debts – Try to pay off outstanding debts, or at least pay them down. If a lot of “credit” is open in the form of zero balance cards, close a few.

Rebuilding history – It is possible to rebuild history even if a report looks very bad. Look at such options as bad credit loans, credit cards for bad credit or even secured credit cards. If you show responsibility with these lending vehicles, your record should improve over time.

If you want to know what lenders will see in advance, it does pay to pull a free credit report. This tool can guide you on the way to repairing problems before they bite you in the form of high interest rates.

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