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New study shows importance of checking your credit report

As we work our way through school, our class grades are very important. Then we graduate and enter the real world, and the only score that we really have to worry about it our credit score. Credit scores are used for much more than just obtaining a loan, so making sure you have a good score is a vital part of adulthood.

With so much importance placed on our credit scores, we constantly look for ways to boost our credit scores, and do everything we can to keep our scores high. It is important when you want to buy a home or a car, they can be used when applying for certain jobs, or signing up for utilities or cell phone services. Your score follows you around like a shadow, so it is important you pay attention or at some point in the future you will wish you had.

In an earlier article on credit scores, I discussed six ways to boost your credit score, one of which was to check your credit report for errors. I noted that a lot of people suffer from lower scores than they should because of mistakes that they could easily fix if they were aware of them. A new study shows that mistakes are more widespread than you may believe.

The Federal Trade Commission recently released the results of a study of 3,000 credit reports, and the results indicate that around 42 million Americans have mistakes on their credit reports. In many cases, these mistakes are not going to seriously impact your score, but in some instances the mistakes are significant.

This means you should verify the accuracy of your report, or you could be costing yourself in more ways than one.

In the study, when those reports with errors were identified, and the errors were corrected, 13% of the people noticed a higher credit score. 2.2% of the people were able to get better credit offers. This means, among other things, better interest rates. No one likes paying interest, and even a small adjustment in interest in your favor can lead to big savings over time.

A separate study, done by the Consumer Financial Protection Bureau shows that just one out of five people check their credit reports for errors, so chances are you could be among those people who have not checked your report lately.

It is easy to do. Visit the FTC's site about obtaining a credit report here.

Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va. His articles typically cover big-picture events and forecasting what impact they will have on the stock market. In addition to writing for Fresh Brewed Media, Michael also wrote for AOL's BloggingStocks for three years, focusing most of his attention on the energy and technology sectors. Follow him on Twitter at @MFatMICenter.

Michael Fowlkes

Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.