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Knowing what your credit report says about you is a key ingredient in staying financially savvy and smart.  An inaccurate report can create very negative consequences in your life – you may be denied a loan or other credit need, left without rental housing or a mortgage, rejected for a job or even for a promotion.  Seeing your credit report on a regular basis may also give you information about possible fraud and identity theft.

It is now easier than ever to get a free credit report regularly, but most Americans do not do so or even know what is on their credit report. Yet in one recent study almost 50% of credit reports were found to have an error.

Many employers conduct background checks, which can include a credit check, before hiring. Employers can use this information to evaluate your candidacy, even rejecting your application because of negative information on your credit report.

Even if you’re already working, you can’t necessarily assume this information won’t affect your employment – some employers may also run a credit check when an employee is being considered for a new job or promotion in the company. Keep in mind that employers are required to ask you for your signature to run a background check.

You can check your credit reports from the three major credit services (Experian, Equifax and Transunion) once a year and get a free report from each of them every 12 months. Go to www.annualcreditreport.com and follow the instructions on this secure site to get a free report. It is so important to know what’s in your credit report, especially if you’re starting a job search. While this report won’t include your actual credit score, it will tell about items such as unpaid student loans, open and closed credit accounts, credit card limits and balances, how many times your credit has been checked in recent months, delinquencies in bill payment of more than 30 days, and bankruptcies.

If you find an inaccuracy, contact the creditor that made the mistake, get it cleared up and make sure that the error is reported to the three credit services. You may have to follow up several times. If the creditor refuses or ignores your request, you can submit a complaint to the Consumer Financial Protection Bureau, which is also a good resource for a number of credit and personal finance issues. At the same time, don’t be lured by credit repair services that cost money, especially if they promise to “erase” bad credit that you have done something to earn. Time is your ally; most negative credit incidents will fall off your report after seven years.

In my next blog, I’ll talk about individuals’ rights under the Fair Credit Reporting Act, other federal laws and state laws and I’ll also talk about ways to handle a poor credit rating with employers. But for now, if you haven’t seen your credit report in over a year, go on-line and get it!