If you're about to apply for a mortgage or car loan, it's a good idea to check your credit history beforehand. That way you can fix any errors and point out any blemishes that do belong to you in advance.

It's common for reports to have errors, says Steve Rhode, founder of Myvesta.org, a nonprofit financial counseling organization. One of his clients at Myvesta.org once discovered he was listed as deceased on his credit report. (Someone with the same name had died, and the credit agency recorded the information on the wrong report.)

The most common mistake, Rhode says, is an account listed on your record that doesn't belong to you. The more common your name is, the more likely this will happen.

To be on the safe side, Rhode recommends routinely checking your reports once a year. "No one cares about the accuracy of your report like you," he says. You should get a report from all three major credit agencies because they may contain different information. (See the box below.

How to set the record straight

If you find an error, the Fair Credit Reporting Act requires credit bureaus and organizations that provide information to them to correct the mistake. But you have to get the ball rolling by requesting an investigation.

You can file a dispute online, by phone or by certified letter. A letter should include:

• Your complete name, address, date of birth and social security number.



• The name of the company you have a dispute with and account number of the disputed item.



• The reason for your dispute, any corrections to your personal information and a request for correction.

Before you fire off a letter, do some research and gather documentation to back up your claim. Disputed information that can't be verified must be deleted by the credit bureau. If an investigation isn't resolved in your favor, ask the credit bureau to include your version of the dispute in your record.

Accurate negative information usually stays on a credit report for seven years -- ten years if you've filed for bankruptcy. If you know the blemish on your report is accurate, you'll have to live with it. The best way to repair your credit, says Rhode, is to keep paying your bills on time and start building a spotless record.

KEEPING SCORE

Stay on top of your credit history by checking your report regularly. Thanks to a new law, you are entitled to a free copy every year from each of the three major credit bureaus through AnnualCreditReport.com. Examine your reports, look for errors and fix them. You can use the information in your report to estimate your credit score to see where you stand in the eyes of lenders. Then, if there's room for improvement, come up with a plan to boost your credit score.