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Your credit history matters a great deal. From loan rates to getting some jobs, what's in your credit report can make a difference in your finances and in your life. If there is a mistake on your credit history, you could be impacted rather surprisingly. An erroneous negative item can bring down your score, and that means you could pay more in interest when you get a loan, or that you could end up losing out on some other financial opportunity, such as a better insurance rate.

Regularly check your credit report for errors, and fix mistakes that you find. That way, you stand a better chance of having an accurate score that lenders are impressed with.

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Check Your Credit Report Regularly

You can get access to your free credit report at AnnualCreditReport.com. You are entitled to one free report each year from each of the three major credit bureaus, as well as reports from some of the other credit reporting agencies. Get your free report, and check it over. Look for discrepancies in your payment history (very important since this is the weightiest factor), as well as other inaccuracies, such as who closed an account, and personal information. Also, make sure that all of the loans reported are actually loans you applied for. An unexpected loan that you didn't apply for could be a tip off that your identity has been stolen.

Fix Mistakes on Your Credit Report

If you find mistakes on your credit report, you need to fix them. Negative items can impact your score to an alarming degree — especially if there are multiple mistakes, or if the mistake is a major one. Here are the steps you need to take to fix a mistake on your credit report:

Contact the credit bureau in writing: Write a letter to the credit bureau, including your personal information, and the information that is inaccurate. Include a statement about what the accurate information should be. Some consumers like to enclose a copy of their report, with the offending item(s) circled in order to make it clear. If you have documentation, enclose copies (never originals) to back up your claim. Send the letter via certified mail so you can verify that the credit bureau received it. Contact the reporting creditor: If you want to speed things along, you can do so by contacting the creditor and talking about the mistake. You can contact by phone, but sending a letter, using the same info you sent to the credit reporting agency, can help, too. Wait for word: By law, credit reporting agencies have to investigate your dispute in a reasonable time period. Usually, the decision is made within 30 days. Wait to find out the outcome of the situation. Take action: If you don't agree with the action, you can appeal the decision. Or, you are allowed to include a note of explanation on your credit file so that others can see your side of the story. If the credit bureau says that you are right, and agrees to change the information, double check after a couple of weeks to make sure that your credit report is now accurate.

Don't let mistakes remain in your credit report. You want to make sure that everything is properly sorted before you apply for major loans. Otherwise, you might find that you have problems with your financial transactions. Check your credit report, and fix errors, and you'll have a better chance at smooth sailing.

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