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What's on your credit report?

SheKnows how to help you through the things that life throws at you: from school and travel to money and career, SheKnows shares expert advice and ideas to help you through life.

Your credit report: What's your score?

In the past, all you needed was a handshake to close a deal. But in today's economy, your name is only as good as your credit rating -- so a good credit report is a necessity, not a luxury.

Finding credit errors

"Your credit report is like your financial report card. Whenever you apply for a loan or for credit, the creditor looks at your report to determine if you are a good risk," says Brette McWhorter Sember, author of Repair Your Own Credit and Deal with Debt. "If you have a credit report with outdated or incorrect information on it, you may not be able to get the loans or credit you want."

Once you have a copy of your file from all three agencies, go over the files carefully, checking for errors. Sember adds, "Errors are actually quite common, as information is not regularly updated."

Quick TipWhile it is possible to have incorrect information removed, correct information cannot be removed from your credit report, even if it is negative. FYI: Information is kept in your credit file for seven years from the date of the last activity on the account, however, bankruptcies remain on your credit for 10 years.

What to do about errors

Contact the credit agency

If you find erroneous information on your credit report, let the credit agency (or agencies) know right away! Write a detailed statement explaining that the information is incorrect. You will need to provide copies of documents to verify your claims, such as account statements or canceled checks. The credit agencies are required by law to investigate any information that you dispute.

The credit bureau must contact the company that is reporting the information and that company then has a specific amount of time, usually 30 days, to respond to the credit bureau's request. If the company fails to respond, the information must be deleted from your file. However, if the company later verifies the facts, the info can be added back to your credit file.

Add a consumer statement to your report

Getting erroneous information corrected may require some persistence. You may have to write several letters disputing the negative entries. If the credit bureau refuses to remove the information, you are permitted to add a statement of 100 words to your credit report explaining the negative credit.

Shannon Dean* obtained copies of her credit report and noticed erroneous information. "Several of my credit card accounts showed late payments -- and I knew I had never made a late payment," Dean says, adding that, "the other two credit bureaus did not list the payments as late."

After making several requests for the credit bureau to investigate and remove the false information with no success, Dean sent a letter to the bureau requesting that the following statement be added to her report:

The information stating that ABC Credit Card has received late payments is incorrect. I have provided the credit bureau with proof that this account has never been delinquent; however, the information has not been corrected. If this negative information is a factor in determining my credit worthiness, please contact me for verification that this information is erroneous or check my credit report with one of the other credit bureaus, neither of which is reporting late payments on this account.

On receipt of this statement, the credit bureau reportedly corrected the erroneous information in her file.

Keep monitoring

Even after false information is removed or if statements are added to explain any negative entries, you should continue to monitor your credit file on a yearly basis by requesting your free credit report. Doing so will enable you to stay informed on the data that is being added to your credit file, and help you preserve your creditworthiness -- which, especially in this day and age, is more important than ever.

* Some names have been changed to protect privacy.

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