You've probably heard that it's a good idea to check your credit report regularly for errors or signs of fraud. If your report contains late payments that you're sure you made on time, unwarranted collections accounts, or even fraudulent credit accounts, then your credit score could take a serious hit. But do you know what to do once you've spotted such problems?

Here's a simple how-to for spotting and resolving errors in your credit report.

Get a free credit report

At a bare minimum, you'll want to check your credit report at least once a year. You can get a free credit report as often as every four months; each of the three credit bureaus (Experian, Equifax, and Trans Union) will issue you a free credit report once every 12 months. Because the three different credit reports will sometimes have different information on them, you might also choose to order all three reports at the same time once every year. You're also entitled to an extra free report if you're unemployed and looking for a job or if you're on welfare. To get your free credit report(s), visit or go directly to the individual credit bureaus' websites.

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Image source: Getty Images.

Look for errors

Once you have one or more credit reports in front of you, look for any signs of trouble -- accounts that you don't recognize, new and unfamiliar collections actions, or even errors in your personal information, such as an incorrect mailing address. Because the information on your credit report is used by lenders, employers, and many others, you'll want to correct even small errors immediately.

Dispute with the credit bureau

If you spot an error or fraudulent account in your name, you'll need to file your dispute in writing with the credit bureau that issued the report. The Federal Trade Commission has a sample dispute letter on its website that you can use as a template. Your letter should include your full name and mailing address, a clear and complete listing of each item you're disputing, and an explanation of how the item was incorrect. If you have any documentation that supports your claim, send copies (not originals) of those documents along with your dispute letter. Send your dispute letter by certified mail, including the "return receipt requested" option. That will give you proof that the credit bureau received your letter, along with the exact date they received it. You can also submit disputes online using the credit bureau's website; in fact, Experian now only accepts disputes submitted through its website.

The credit bureau is required to investigate your dispute unless it's obviously frivolous, and it will usually do so within 30 days. The bureau is also required to forward your dispute to the company that initially reported the disputed item. For example, if you see a credit card on your report that you don't recognize and you dispute it, the bureau will forward your dispute information to that credit card company. The credit card company in turn will be required to investigate your claim and report back to the credit bureau with its findings. If the credit card company finds that your claim is correct, it must inform all three bureaus and ask them to fix your credit reports.

Dispute with the company

While the credit bureau should pass your dispute along to the company that provided the original information, you should also send a copy of your dispute letter (and copies of any backup documentation) directly to that company. Send the letter by certified mail and with return receipt requested to the company's address as it appears on your credit report; if there is no address, call the company and ask them what address you should use for your dispute letter. The company is then required to contact the credit bureau and either tell them about your dispute or (if they agree with you) have them remove the offending item from your credit report. Contacting both the originating company and the credit bureau helps to ensure that someone will do something about your dispute.

Next steps

After the investigation is complete, the credit bureau is required to send the results to you in writing. If your credit report changed as a result of your dispute, you'll receive an extra free copy of your newly revised report. You can also ask the credit bureau to send the updated version of your credit report to anyone who got a copy of the report within the last six months (or the last two years, for reports that were pulled for employment purposes).

If the originating company refuses to remove the offending information, you can ask the credit bureau to include a statement of your dispute in your file for future credit reports. For a fee, you can also have the credit bureau send a copy of your dispute statement to everyone who recently requested your credit report.

If your dispute doesn't work out as you'd hoped, don't despair -- with time, the item will drop off your credit report on its own. Most negative information will disappear from your credit report after seven years. That's a long time to wait, but at least the item won't be hanging around your neck forever.