NEW YORK (MONEY Magazine) - To see yourself as lenders see you, you need two key things: your credit report and your credit score. Then you'll know if there's work to be done or not.

As of last year, everyone is entitled to a free report from each of the three major bureaus -- Equifax, Experian and TransUnion -- every year. The only source for truly free reports is AnnualCreditReport.com (877-322-8228).

But watch out: A dizzying array of companies peddle "free" credit reports through web sites such as FreeCreditReport.com (run by Experian) and FreeCreditProfile.com (TransUnion). But to get a free report from sites like these, you must subscribe to a credit monitoring service that you likely don't need. If you don't cancel within 30 days, you'll face fees as high as $13 a month.

Getting your credit report online can be an exercise in frustration. Why? Proving who you are means answering a series of detailed questions such as the model-year of a car you sold long ago or the name of the lender that financed your home-equity loan 10 years earlier.

A better bet is to print out and mail the short order form. Yes, it will take two weeks for your report to arrive. But unless you are applying for a mortgage tomorrow, that's no big deal.

There's one important thing missing from your free credit report: your credit score, which is the calculation of your creditworthiness that lenders, insurers and even utility companies look at when you do business with them. Your score can range from 300 to 850, but practically no one has one lower than 500.

To learn what your score is, you have to buy it -- or ask a loan officer when you apply for a mortgage or other loan. By law, he must provide it upon request.

You actually have at least three scores, each one generated for a different bureau. You're best off buying a FICO score (for Fair Isaac, the company that pioneered credit scoring) because more than 75 percent of mortgage decisions are based on it.

Of the three credit bureaus, only Equifax sells a FICO score, and you can buy it for $6.95 at AnnualCreditReport.com when you request your free report. When you're applying for a major loan, though, it's smart to get FICO scores from all three bureaus in advance because the information can vary; you can buy the trio for $45 at Myfico.com.

A credit score of 720 might typically qualify you for a credit-card rate of 9.6 percent vs. 18 percent for someone scoring 600. For every $1,000 of your balance, you'd save $86 in annual interest.

Step 2: Polish your credit profile