Whenever you choose to have something financed (home, car, furniture, etc.), the seller will naturally want to run a "credit check" on you. But what does that mean? What is listed on a credit report? How far back does the report go? What if there are errors, what do you do?

A credit report is a historical listing of all financial transactions you have had for the past five years. Every credit card you own or owned, anything you financed, all types of loans, defaults, late payments, serious credit infringements, and information on public record are all listed on your credit report. Call it your "report card" for personal financing information. And just like school, you get graded upon your performance or lack there of. But many times, the information listed is too old or inaccurate or just plain wrong; and only you can fix it.

One of the most neglected aspects of anyone's life is the proper management and maintenance of their credit history and credit report. Why? Because no one ever does it, no one ever bothers. And yet, just like the all too often forgotten yearly physical, you should be checking and adjusting your credit report every year.

By ordering your credit report, you can see if there is any incorrect information in it and take steps to work with the credit bureaus to make changes to it.

The reason why should be obvious - ever been denied credit? Well, that denial was probably based upon your credit report! Here are just a few reasons to check your credit history at least once a year:

Identity Theft - that's right, someone right now could be ruining your credit because they we able to steal your Id information. This is especially important if you have made purchases on the Internet or have recently been robbed. Just this alone should be reason enough to check your credit history every year.

Misspelled address information - always causes the red flag to go up. Be sure all names, addresses and phone numbers are properly spelled. Removal of old history - your credit history should only go back 5 years. Maybe you had some problems several years ago but have since cleared up all debts - only the previous five years should be listed on your report. Judgment debts and Bankruptcy are usually listed for 7 years or more.

Disputes - credit and collection agencies are quick to report defaults but slow to list it as paid. Be sure and correct any disputes immediately Balance verification - make sure the balance is accurate and all accounts which are paid off do indicate it.

Credit applications - too many spells trouble to financing entities. Make sure you remove all erroneous applications. Note: If you have been car shopping recently, make sure to remove all applications - every dealer you visited probably ran a credit check on you.

When you are applying for a home mortgage, your credit report is the main body of information used to determine your ability to pay your loan. If you haven't gone over your credit report and cleaned up any discrepancies, you are just asking to be "grilled" about certain issues and possibly denied.