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Checking your credit report could save you some headaches

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BIRMINGHAM, AL (WBRC) -

When was the last time you took a good look at your credit report? A new government report says you could be one of millions of American's who have wrong information on their credit history and don't know it.

"Actually we just refinanced our house and we had it checked recently," said Dennis Piwinski.

Piwinski checks his credit report once a year to make sure nothing slips past him. That is not the case for some who let years pass by without checking in on their credit.

"People inherently are busy with other things a lot of times this isn't a real high priority. You need to make sure it's part of your annual financial review," financial advisor, Stewart Welch said.

A study by the Consumer Financial Protection Bureau found only one in five consumers check their free credit reports. Welch says it is the best way to protect yourself from mistakes. He also explains there is another, less appealing way to become aware of inaccuracies in your credit history.

"You get rejected for a loan," Welch said.

Some inaccuracies like an incorrect address won't hurt you, but others like a misreported late payment could. So how should you handle mistakes? Welch says head straight to the source.

"Each credit reporting agency has a process to dispute an error. Send a letter to them outlining the dispute. Include copies of all your documentation. Request they fix it and remove the inaccurate item. It's also a good idea to send them a copy of the actual credit report and circle the items you believe are inaccurate," Welch said.

He says there is another way to catch mistakes early. That's by enlisting the help of a credit monitoring service.

"Monitors activities. It's about $16 a month. So you have to decide if it's worth it," Welch said.

For Piwinski it was.

"It's really good any time someone tries to open up a line of credit or anything suspicious we get pinged," Welch said.

By law, credit bureaus have to start investigating a reported mistake within thirty days, but there is no limit on how long the investigation can span. Welch says it could be from a month to years in the worst cases. Welch hopes to eventually see some reform in this area that would require all issues be resolved in 60 days.

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