Ask the Dollar Diva By Dorothy Rosen • Bankrate.com

How do I fix my credit report?

Dear Dollar Diva,
I was recently turned down for a credit card because of an error on my credit report. It reported an old bank charge that went into collection. The charge was a mistake, and after many months of fighting, the bank finally found its mistake and dropped the whole thing. It never occurred to me that the bank would not repair the error on my credit report. What can I do to fix this?

Congratulations on taking your bank to the mat and winning. Those banks are something else; and they're getting worse by the minute. It seems they just don't care about the little guy any more -- so the little guy has to take care of himself.

As far as the mistake on your credit report goes, join the club. The bad news is that about half the credit reports contain errors. The good news is that the Fair Credit Reporting Act makes the credit reporting agencies fix the mistakes.

How do I make them fix it?

Follow these steps to repair the damage:

• Check out the reports from the three top reporting agencies, so you can make the correction across the board. If you don't have all three, get the missing ones now. The company cannot charge you for the copy if you were turned down for credit within the last 60 days because of the information it provided on its report. Otherwise, the most you'll have to pay is $9. You can order the TransUnion and Equifax reports on the Internet:

• Trans Union, (800) 888-4213

• Equifax, (800) 997-2493

• Experian (formerly TRW), (888) 397-3742

• Gather all of the documents you have to support your claim, and attach them to the letters you are going to send to the credit reporting agencies. Make a copy for each agency that shows the error on its report. It's a good idea to highlight the pertinent lines. It's also a good idea to label each document as Exhibit I, Exhibit II, Exhibit III and so on, so you can refer to the specific exhibits in your letter.

• Send a letter to each credit-reporting agency that is showing the error on your report, and explain what happened. Or, if letter writing is not your thing, fill out the dispute form that the credit-reporting agency provides. Whatever you do, refer to the documents that you will be attaching to support your claim, and keep it simple.

• It never hurts to send the letters by certified mail, so you'll have proof of the dates they were received.

• Read The Federal Trade Commission's "A summary of your rights under the Fair Credit Reporting Act." You'll sound smart when you talk to them, and you'll know your rights.

• If the credit-reporting agency cannot verify the information within 30 days, tell it to remove the item from your credit report. That's the law.

• Make sure you get a written report of the investigation and a copy of your report if the investigation results in a change. The agency has to give this to you.

What if the bank says the original entry is correct?

Life isn't easy; neither is cleaning up a credit report. If the bank says the original entry is correct, don't surrender. You still have some rights.

Here's what to do:

• Go directly to the bank with your dispute, and growl at them until they do what they're supposed to do.

• In the meantime, write up a statement in 100 words or less, telling your side of the story, and send it to the reporting agencies. They are required by law to include the statement in your report.

For more insights on cleaning up your credit report, read the Diva's "A clean credit report for less than 50 bucks?" and Green Magazine's "How to check your credit report."

DOROTHY ROSEN has a master's degree in finance, with a specialization in accounting, from the Kellogg Graduate School at Northwestern University in Evanston, Ill. Rosen has more than 15 years of experience in the financial arena, serving in Illinois and Florida as a certified public accountant, financial consultant, expert witness and educator. She is owner of Dorothy Rosen, CPA, a public accounting firm that serves individuals and small businesses.