If you don't know how to read a credit report or don’t know your credit score, raise your hand. First, the good news: you're not alone. According to a recent study from BadCredit.org, more than 30% of Americans have no idea what their credit score is. Next, the not so good news: being in the dark about your credit history can have serious financial ramifications, as errors on your credit report could be lowering your credit score or worse, you could be a victim of identity theft and not even realize it. For details on how — and why — you should review your credit report regularly, read on.

A Little Number That’s A Big Deal

Your credit score…it’s more than just a number. “All kinds of decisions are made about you based on your credit score,” says Lisa Gill, an expert in credit scores and reports for Consumer Reports. “Some of them are obvious, like if you apply for a credit card, or you want to get a loan for a car, or a loan to buy a house, or even a loan to go to school, or a personal loan for any reason.”

Beyond that though, your credit score is used for a number of other things, including getting a company to supply you with utilities, helping a landlord decide whether he or she will rent to you, or even whether or not an employer hires you. It can even affect how much you pay for things like homeowners or car insurance.

Your credit score will range from 300 to 850. The higher the score the better, as it will give you more access to various credit products, as well as lower interest rates. For the purposes of this story we’ll be sticking to how to read a credit report. If you want details on how your credit score is calculated, click here.

How To Get Your Credit Report

Getting your credit report is actually very easy and not to mention, free. First, you’ll want to go to AnnualCreditReport.com. Note–there are many sites that will try and get you to pay for your credit report. Do not do that…I repeat, do not do that. AnnualCreditReport.com is the only source for free credit reports and is authorized by federal law. On the site, you can access reports from three of the largest credit bureaus in the U.S., including Equifax, Experian and Transunion, once per-week at no cost.

While on the site, you’ll be asked to follow the below steps:

1. Fill out a form with your personal information. Note, you will have to enter your Social Security Number.
2. Select which reports you want (it’s recommended you get all three: Equifax, Experian or TransUnion)
3. Answer a few more security questions for each credit report. These questions are meant to be more difficult, and you may even need to access your records to answer them. Gill says she’s talked to a lot of people who have had issues answering the questions, because again, they’re tougher than average security questions. If you run into trouble, you can call each of the companies and have reports mailed to you.
4. You’ll then have access to your reports. From there you can save or print them to review later

You’ve Got Your Reports…Now What?

Now that you have your reports, you’ll need to sit down and take your time reviewing them for accuracy. “Some incorrect information can have a negative impact on your credit rating or could be linked to serious matters like identity theft,” warns Bruce McClary of the National Foundation for Credit Counseling.

As you review, pay special attention to the following:

1. First, make sure your full name and your Social Security Number are all correct. Then, review the addresses listed for accuracy. Note, every address where you lived does not need to be listed. Make sure though there aren’t any addresses that just don’t make sense–if so, it could be a case of someone trying to sign up for a credit card using your name and having it sent to their address.
2. Next, look at the list of bank accounts and credit cards and make sure everything is correct. Review your list of loans and make sure those listed are yours. Also, keep an eye out for any mentions of late payments that aren’t accurate. Gill says reviewing this section is extra important. “It will be flagged if you’ve missed a payment or you’re one day late outside of that 30 day window,” she says. “Make sure it’s correct, because that stuff really dings the credit score.”
3. Look to see if there is anything in collections–for example, it might be an old utility bill from an apartment you lived in 10 years ago that you forgot about. It doesn’t matter whether the bill is $25 or $2,500, having it in collections can really drag your credit score down. If you see something in collections that you don’t recognize, you will be able to view the name of the collections agency and contact them for more information. When you reach out, Gill says to remember to ask for the debt to be “validated.” This will buy you 30 days to sort things out.

What To Do If You Find An Error

Going through your credit report, you might find inaccuracies. For example, it could say you were a day late making a payment, when in actuality, you weren’t.

If you find yourself in this position, you can: prepare a letter, addressed to the credit bureaus where the error appears, explaining the situation. You’ll also want to make copies of supporting documentation, for example, a copy of your checking account statement showing a payment coming out (make sure any sensitive information is blacked out, though). Then, send the letters and supporting documentation by registered mail. Once they’ve been delivered, the credit bureaus will have 30 days to respond.

The Bottom Line

Now that you know how to read a credit report, experts say you should make it a regular part of your financial wellness routine. “Once a month is recommended as a standard practice, mostly because it allows you the opportunity to react quickly to any errors that may appear,” says McClary. “Fast action is critical in situations where someone else is using your personal information to open or access lines of credit.”