Credit laws give individuals the right to contest their credit report if it contains inacurracies. If you have sufficient proof, then repairing your credit score is easy.

Having a good credit record is of paramount importance. This is the reason you must make the effort to have wrong information on your credit report corrected. If you provide proof that the mistake is not yours, you can fix your credit report and hence your credit status. Here are the steps to follow.

1. You are entitled, under the Fair Credit Reporting Act (FCRA), to inform the credit bureau about inaccuracies in your credit report. It could happen that the error was not intentional. One possible explanation is that you have a very common name - John Smith as an example. Do you know how many John Smiths there are in your state alone, not counting the 51 other states? If a John Smith from the same state you live in misses a loan payment, that omission could be entered under your name. If you have proof that you, John Smith, did make the payment, you can advise your credit bureau that they made a mistake.

How? Write them. Attach a supporting receipt from your bank showing that you made that mortgage payment. Follow up if you don't receive a reply. Don't assume that the mistake will be corrected once you send off your letter.

If you're curious as to what your credit score is, you can go to the FICO web site. They give out credit scores consisting of three digits. If your score goes above 720, you're in great shape! If it's under 720, you need to do something about it to get it higher. Don't let a low credit score get you down. Just think -others are also struggling with low credit scores; at least they're doing something about it, and so should you!

Take a look around at the FICO web site. There's a section where interest rates are provided based on your credit score. So if you wish to apply for a loan, look at your credit score. If it's above 720, there's a chance the interest rate you have to pay on a home equity loan for example won't be as high as the person with a score below 720. Want to know what the difference is? If your FICO score is good (720 and higher), you will only be charged 5.799% interest on a 15-year home equity loan. This rate was as of December 1, 2007 so you need to get an updated rate. Now, if your credit score was between 500-579, you would have to pay 10.44% interest. That's a huge difference!

3. If your bad credit score is entirely your fault, again, don't despair. The beautiful thing about credit is that you can re-build it. It may take time but with restraint your credit standing will recover. This is why it's essential to use credit (a) only when you need to and (b) when you do, use it wisely. Here are some repair credit strategies for you:

avoid applying for loans or lines of credit you don't need while you're mending your credit score. Every time you apply for a new loan, the information is put on your credit record;

prompt payment of your bills is strong encouraged. We get into a cash crunch at some periods of our life leading us to skip a payment or two. While it's not a criminal act, habitually missing payments will give you that "trapped" feeling - perhaps a worse feeling than actually being behind bars;

like everyone else, you have a limit of how much you can use from a revolving line of credit. If your bank offers you say, overdraft protection of up to $1,000, stay within that limit;

consider debt consolidation - if you're feeling choked by a whole slew of interest rates, ask your financial adviser if it makes sense to consolidate all your loans. That way you pay one loan with one interest rate;

pay with cash, if possible - lots of people walk around with heavy-duty plastic in their wallets. Dare to be different. Pay cash for your purchases;

communicate often with your bank officer or loan officer. Time to turn on the public relations person in you. Let them know about your financial plans, show them you care about your credit standing. Maintain regular contact - who knows, your banker may just increase your line of credit even if your credit report is not so outstanding.

Good credit is a valuable asset. Don't hesitate to act right away if your credit score is low. Make sure you submit supporting document when you write the credit bureau requesting them to remedy the errors in your report.

Never let your bad credit report go uncorrected if there are errors. It is your personal duty to obtain a good credit score and maintain it that way.

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Steven J. Talrechi has been studying credit reports and credit reporting practices for the last ten years. He is keen in helping individuals get a 2nd chance checking account and 2nd chance bank account when banks turn them down.