A good credit score is important because it can determine whether or not you get a loan, what interest rate your auto loan will come with, or even whether or not you will be hired for a job. As a result, experts stress the importance of checking the accuracy of your credit report and your credit score numbers at least once a year.

Being denied a credit application can be embarrassing. Plus, just think about the stress of being denied credit when you need it. If you want to avoid the embarrassment and stress of denied credit applications just when you need it most, just do the credit report check at least once a year to find out where exactly you are on the credit score scale, as well as to make sure that all the information is correct, and to verify that the report does not contain inaccuracies or grave errors.

If you do find an error, you will need to work on clearing it up. How?

It may be a good idea to first write a letter to the creditor whose statements you believe are wrong. Hopefully, the creditor admits the mistake and sends corrected information to the agency.

If that doesn’t happen, then you’ll need to send a dispute to the agency. You will need to make a copy of your credit report and mark every item that is incorrect. Write a dispute letter to the reporting agency explaining in detail what errors you found and request an investigation of your case. Send any supporting documents that you can find as evidence (you will find the address on the report). Also, remember to use certified mail and request return receipt , so you can prove the letter was delivered.

If you find out that your credit score is low for a good reason, e.g. you were late with mortgage payments, or perhaps you missed an auto loan payment, then you will have time to work on raising your credit score by improving your money management skills without resorting to the dubious practice of using credit repair kits or other credit repair services, that can really put you in even deeper trouble. Listen to my advice and never trust the claims made by various credit repair companies and their ads.

If you are behind with your payments because of financial hardship, contact the lender as soon as you can to discuss the possibility of arranging a different payments schedule that will help you pay your debt. Most lenders will work with you, as they want to recover they money.

If the low credit score is due to your negligence, however, keep in mind that it will take a lot of effort from your part to redeem yourself in the eyes of your creditors and credit agencies. In some cases it will take several months until the credit score will increase to a positive value again.