A credit report tells a story. Like blood pressure tells the doctor something about a patient’s stress, a credit report tells a financial institution something about how a person deals with finances (and how likely he or she is to pay back a loan).

The numbers on a credit report can make the difference between obtaining the financing you need to start your small business, or being turned down. It may also result in higher interest charges on a loan if your credit report numbers are low.

There are five steps anyone can take to improve their credit report, and be more “credit worthy” in the eyes of a lender:

1. Be Punctual

Late payments, items in collections, and bankruptcies will negatively affect the credit score.  Bills should be paid in full and on time (to avoid interest charges), and if that is not possible one month, at least make the required minimum payment, by the due date.

2. Be Curious

Sometimes credit reports have errors – someone else’s bad behavior may influence the wrong report.  Everyone should check his or her credit profile annually, and if errors are found, take action to remove inaccuracies.

3. Be Cautious

Anyone using a credit card should keep a monthly balance under 50% of the card’s limit. For someone with an authorized limit of $1000, it is wise not to run up more than $500 in charges in a month (and of course, pay it off).

4. Be Patient

The slow and steady payment of small amounts of credit, on time and in full, is the best way to build or improve a credit bureau for anyone.  Time is one of the most significant factors in a credit score: that and using credit responsibly.

5. Be Prudent

Each inquiry – for a cell phone, a car loan, for another credit card – shows on the credit report.  A large number of inquiries in a short period of time is seen as “credit seeking” behavior and will negatively influence a lender, as well as the credit bureau.