Most of the recent changes in credit are a result of two things: The impact of computerization or electronic processing and government regulations.

Computerization allows credit organizations to amass and process large amounts of information, analyze it, and act on it quickly. The computerization of information has also greatly reduced the role humans play in the credit process and as a result increased the amount of incorrect information found in a credit file. Previously, consumers sat down and discussed the possibility of credit approval for a loan or credit card with another person. The loan processor would even have a role in determining the interest rate. Applicants also had the opportunity to challenge and correct information that was wrong.

Now many applications are completed online and approved or denied without talking to another human being. While convenient, it can also be frustrating because there is no one to discuss the factors the decision is based on and whether it was correct or not.

Whether this is good or bad or right or wrong can be argued, but this is the reality of credit in the 21st century. The defense for consumers is to understand how the system works and control the things within their power. All credit users should know how their actions affect their credit worthiness; how to get a copy of their credit report, how to read it and how to apply for corrections of reported errors.

Beginning in 2005 the federal government mandated that the three major credit reporting agencies (Transunion, Experian and Equifax) must provide individuals with a free copy of their credit report once a year.

Obtaining a copy of your credit report and reviewing it for accuracy is a vital step in managing personal credit. Consumers can request a copy over the internet at annualcreditreport.com; by phone at 1-877-321-8228; or by mail by sending a request to Annual Credit Report Request Service, PO Box 105281, Atlanta GA 30348-5281.

Take the time to review every item listed to make sure it belongs to you. If any errors are found, follow the instructions given for corrections. Reviewing these reports can be confusing, but it is time well spent in the process of managing your credit. It is also important to know that the reports from the three agencies may not contain the same information. One strategy in reviewing the three reports is to compare the information in each of the reports to see where they don't agree. This is a good way to find errors.

The other factor that can affect personal credit is government regulations. These can be local, state or federal. A recent change at the federal level impacted every person who has a credit card and does not pay off the balance each month. The government increased the minimum amount credit card companies must charge each month. So, the amount due every month went up and consumers didn't do anything different. To impact these changes consumers must be informed of the proposed regulations and communicate with government representatives.

Understanding all of this and taking action to manage it is not easy, but is necessary if consumers do not want to be at the mercy of a system that may not be accurately reflecting their true credit worthiness.