An important part of managing personal finances is keeping an eye on your credit report. Why? Because credit reports are compiled by companies (made up of people), and reports to your credit score are made by people, and with every transaction reported there’s a potential for a mistake. It’s your responsibility to be sure that your credit report accurately reflects your credit history.

Consider the damage that an error on your credit report can make. If an entry indicates that you have not made timely payments, your potential for future credit is damaged. If you’ve planned to purchase a new major appliance on credit, your budgeting efforts have been wasted. Changing your budget to arrange another method of purchasing the appliance may be difficult or impossible. You could find yourself moving to a new home without any means of purchasing a refrigerator, all because your credit report was flawed.

So what can you do if you find a mistake on your credit report? It’s your right to question any transaction reported on your credit report. If the company that made the report finds it has made an error, the transaction will be corrected and an updated report sent to any creditors who got the incorrect information. If the company making the report simply doesn’t respond, the entry will be removed. While it may seem like too much trouble to question an incorrect report, consider how difficult it would be to manage your personal finances without credit.