Your credit score is one of the most important financial tools you have. And just like any tool, it will only benefit you under certain conditions. First of all, it needs to be inspected for any defects. Many people don’t bother to examine their scores for various reasons. They may assume that it’s not necessary. Credit companies keep track of millions of records so they must be thorough at what they do, right? Not always. The problem is, these companies have no way of knowing for sure if the data they receive is totally accurate, and they certainly don’t have the manpower to examine every detail presented to them.

Another reason for neglecting records may just be a sense of impotence. Perhaps they have heard that all too familiar voice on the other end of the line saying ‘I’m sorry, there’s nothing we can do’. Whatever the reason may be, sooner or later it’s going to end up costing you money if the information is not correct. An adjustment of just a few points on a credit score can mean the difference between getting approved or disapproved for a mortgage loan, for instance. Or, at the very least you may be settling for a higher interest rate.

Secondly, you need to understand that your ‘tool’ is being used by total strangers. You are living in the information age where personal privacy is pretty much a thing of the past. All the more reason to verify your credit information. The Fair Credit Reporting Act, adopted in 1970, gives people the right to challenge the accuracy of anything that may have been reported about them to a credit bureau. The ‘tool’ has been placed in your hands!

So, what should you do if there is a discrepancy in the information you find? You can send a letter of dispute detailing the entries you feel are inaccurate. The Federal Trade Commission has a website that gives helpful tips on the best way to approach this and what you may expect from the reporting company in return. There are strict guidelines that they must follow when you contact them. If you don’t feel comfortable doing this on your own you can hire someone to do it for you.

There is a caution here. You need to be aware that most of the advertisements promoting quick credit fixes are no more than scams. Consumers with poor credit histories are prime targets for these ads. A legitimate company will tell you that repairing a credit score takes time, serious effort and in some cases, a debt repayment plan.

Finally, know your rights. You are entitled to one free report a year from each of the three major credit bureaus. You don’t have to pay anyone for this service; it’s the law. But no one has the responsibility to do this for you; it is yours alone. Repairing your credit score and staying current with the information in your file will not only offer you the advantage of saving money on your purchases but will also keep you a step ahead of potential identity thieves. Take good care of that tool!