Q My wife and I recently applied for a credit card and were surprised to find that there were a number of problems listed on our credit report. Actually, each of the problem items was an error on the part of the credit-reporting company. How can we get those companies to correct these errors?

A Your question is a good one and I would like to deal with it in two parts. Many people are unaware of the service that credit-reporting agencies offer, so, in this article, I'd like to provide background information on what they do, as well as discuss how their reports are used. Then, in my next column, I'll show how you can resolve the problems you mentioned.

Credit bureaus serve the business community by providing information about consumers — where they work and live; how promptly (or slowly) they pay their bills; whether they've been sued, arrested, or filed for bankruptcy. Practically speaking, before you will be provided a consumer loan, granted insurance or given a new credit card, your credit record will be reviewed.

While there are many local credit-rating organizations, there are only three major national credit bureaus: Equifax (800-685-1111 or www.equifax.com), Experian (800-682-7654 or www.experian.com) and Trans Union (800-916-8800 or www.transunion.com).

It is important that you keep up-to-date with the information the credit bureaus are maintaining on you. Even if you think your credit is stellar, errors are fairly common and can impact how businesses make decisions regarding the issuance of credit. The best way to obtain the information the credit bureaus are sharing with others is to periodically request a copy of your credit record. The credit bureau is obligated to provide you with all of the information in the report — including, in most cases, the sources of the information. They must also provide a list of everyone who has requested your report in the last year (two years if the request is employment-related).

A free report is available if you request your report within 60 days of a company taking adverse action against you. You are also entitled to a free report if you can prove that 1), you're unemployed and plan to look for work within 60 days; 2), you're on welfare; or 3), your report is inaccurate because of fraud. Otherwise, you can expect to pay up to $8 per report.

Once you receive your report, you'll find that it includes key information for each of your credit accounts. This will include the creditor, type of account, terms of credit, amount of the original debt, credit limit and the current balance outstanding. There will also be a payment profile documenting whether you have been timely in meeting your obligations. You will need this information in order to track down the errors that you mentioned. We'll discuss what steps you should take to correct these next time.

God love you!

Phil Lenahan is director of finance for Catholic Answers in El Cajon, California.

Reach Family Matters at [email protected]