Finding an inaccuracy on something as important as your credit report can be alarming. After all, the impact can be wide-reaching and detrimental.

What does it mean? How will it impact your credit score and loans? More importantly, are you the victim of credit fraud?

Luckily (or unluckily, depending on your point of view), simple credit report errors are fairly common. A 2012 study by the Federal Trade Commission found that 20% of consumers had some type of error showing up on their credit reports. These ranged from incorrectly-reported late payments to inaccurate high balances or credit utilizations, and everything in between. While you may be in good company, though, this probably isn’t much consolation. So, what do you do if you find an error on your own credit report?

Depending on how you came across the error in the first place, you may need to pull your reports from all three credit bureaus – TransUnion, Experian, and Equifax.

You are entitled to one free report from each of these agencies, once every 12 months. You’ll need to visit annualcreditreport.com (the only government-authorized website for these free reports) and pull all three, if you haven’t already.

If you’ve already received your free report in the past year, it’s probably well worth the cost to order an updated version, especially if the erroneous report wasn’t shown on the previous version. To do so, you can order the report directly through each of the bureaus, or through a third-party site. Once you have the updated reports from all three companies, compare them. Does the error appear across each of the reports, or only on one or two of them? Is the information different in any way?

Next, determine whether or not the error is related to a legitimate account, either one you currently own or one you once owned in the past. If so, you can go to the lender first, and see if they can resolve the problem. Give them a call and ask to speak to a supervisor, but first:

• Make notes of which bureau is showing the incorrect report.
• Write down all information about why you think the report is in error. Does it have a late payment showing when you know you paid on time? Does it say that you once had a high balance of $10,000 when you know you’ve never charged more than $750 on that card?
• Gather supporting documentation. If you know you paid on time but it’s showing as 30 days late, find your bank statement or cancelled check. If it’s an honest mistake, most companies will be willing to help you resolve the issue quickly and easily. This is the ideal outcome!

However, some companies may believe their reporting to be correct. In this case, you will want you to submit a dispute in writing. Send copies of all supporting documentation along with a letter disputing the report, and send it with a return receipt. Then, wait 30 days to see what happens. If you don’t hear back, contact them again for an update.

Some companies – whether they believe your claim to be correct or not – will ask you to file your dispute with the credit bureaus first, before they’ll revise the report. If this is the case, you’ll have a little extra work on your hands. However, it’s still worth the effort to ensure your credit is as accurate as can be.

Another potential outcome is that the report is actually correct, and the company is able to provide proof to you. You may have simply forgotten that you were late in paying your Macy’s card balance, back in April 2014. In this case, you may be a bit embarrassed, but at least your credit report is accurate. That counts for something!

The worst case scenario is that your credit report shows an inaccuracy on an account that you don’t own.

If this happens, you’ll want to ensure that you very carefully scan the rest of your report for any other accounts you don’t recognize or may have been compromised in some way.

Next, you will want to contact the lender and get more information. They can tell you when the account was opened, how it was opened, and if there is any current activity. They are usually able to shut down the account if it is fraudulent. You can also send them a written letter (use a return receipt!) to let them know that the account in your name is fraudulent and that you dispute all reports on your credit relating to the account.

Lastly, you may want to consider placing a freeze on your credit. There is usually a small fee involved (around $10) each time you freeze/unfreeze your credit. However, it will prevent anyone from opening a new account or utilizing your information for new lines of credit. If your identity has been stolen, this is the best bet.

What happens next depends on the nature of the error.

If a company simply made a mistake in their reporting to the credit bureaus, it may be a simple fix that is reflected on your credit in 30-60 days. Easy peasy.

If the lender doesn’t believe their report to be in error, you may have a bit of a fight on your hands. Stick to your guns, though, especially if you plan to apply for a new mortgage or get a new job in the near future. In those cases, every little bit counts!

Worst-case scenario is that you discover your identity has been compromised, due to fraudulent activity. Your credit is likely to be impacted, and the mess may take months to clean up. Be sure to keep a close eye on all reports, though, monitoring your credit regularly for any new (questionable) activity. Also consider placing a freeze on your credit, to ensure that no new accounts are able to pop up.

One of the best ways to improve your credit is to clean up any errors you might find. So, go snag your free credit reports for the year and look them over.