Check your credit report for free before 2015

HOUSTON (KTRK) -- The last day of the year is a good time to check your credit score--that critical number can determine whether you get a loan or a job.

It's based on your credit reports, yet a Consumer Reports' survey finds close to half of Americans never check their credit reports to make sure they are accurate.

Nathaniel Lewis is hoping to move out of this apartment and purchase a home. But recently, when he sought help applying for a mortgage, he discovered his credit report showed he had bad debt totaling more than $180,000.

"When I saw what was on my credit report I was flabbergasted. About 80 percent of it wasn't mine," Lewis said.

The problem was his records had gotten mixed up with another man with the same name.

A new Consumer Reports survey of 3,000 Americans found that credit errors are surprisingly common. Of those who checked their reports, about 20 percent found mistakes that could lower their credit scores.

"Mistakes can lead to losing out on a job, on an apartment rental or on a good interest rate on a loan. That is if you're not turned down altogether. Credit report mistakes can really hurt," said Tobie Stanger with Consumer Reports.

For instance, on a $300,000 30-year fixed mortgage, if your credit score drops 100 points from a good 780 down to an okay 680, you'll pay almost $25,000 dollars more during the life of the loan.

"It's not so easy fixing a credit report error. More than half of the people in our survey who tried were either rejected, ignored or faced some other roadblock," Stanger said.

To dispute a credit report, the first tip is to avoid companies that promise to fix your credit for a price.

Put your request in writing to one or more of the three major credit-reporting agencies, Experian, Transunion and Equifax. Be sure to include proof of your identity and your full Social Security number.

For serious errors, Consumer Reports also says you may have to resort to hiring a lawyer.

Remember to check your credit report regularly which you can do free once a year with each of the three major credit bureaus. Go to annualcreditreport.com.