Getting a copy of your credit report is one thing, but thoroughly understanding it is another matter all together. Whether you're a millennial just entering the workforce or a baby boomer getting ready to retire, having a basic grasp of credit report basics can make all the difference to your financial future.

Online service provider review website NextAdvisor has compiled a list of six must-know tips about the ins and outs of credit reports. CNBC.com shares what you need to know.

— By CNBC's Kenneth Kiesnoski
Posted 23 March 2016

Source: NextAdvisor

Everyone has not one but three credit reports, and each is slightly different. There are three credit bureaus — Equifax, Experian and TransUnion — that creditors report to, but most don't report to the whole trio. Information that appears on one report might not appear on the other two; that's why it's important to check all three. If you don't, you might miss incorrectly reported information — which could mean you don't get that car loan or home mortgage you want.

Source: NextAdvisor

Thanks to the federal Fair Credit Reporting Act, everyone in the U.S. is entitled to a free copy of each of their three credit reports once every 12 months. To request free copies, visit AnnualCreditReport.com, government-operated but sponsored by the three bureaus. As you can only view these free reports once a year, it's a good idea to print out a copy for later reference. Note: In order to view your actual credit score, you'll have to pay an extra fee.

Source: NextAdvisor

You should definitely print out each of your three credit reports each year, but in a world rife with online identity theft and ever more data breaches, that often just isn't enough. Consider a paid or free credit-monitoring service that offers regular access to your credit report information, as well as access to credit scores and alerts about changes in status. Some such services will even help you with credit bureau disputes. NextAdvisor offers a helpful comparison chart of leading credit-monitoring firms.

Source: NextAdvisor

It's not rocket science. Data-packed credit reports might initially appear intimidating, but they can be broken down into four types of information: identifying information, credit history, public records and inquiries. For an example of how this setup works, download a sample credit report from Experian's website. Reports from each credit bureau might look slightly different, but all should follow the same general structure. If you subscribe to a credit-monitoring service, it may provide you with an even easier-to-understand summary of your reports.

Source: NextAdvisor

Do you have an account in collections or a loan default on your credit reports? Don't worry; it won't be there forever. According to Equifax, unpaid accounts, late-payment history, collections accounts and other such negatives will remain on your report for no more than seven years, while accounts marked as paid remain for up to 10 years. (Details vary from state to state, so be sure to check.) Positive data remains on reports longer to give consumers a leg up on rebuilding bad credit. If you start to do the right thing, time is on your side.

Source: NextAdvisor

You can dispute incorrect items on credit reports. While no one — not even "credit repair agencies" — can remove correct negative data from your credit reports, you are entitled to dispute information that you are certain is wrong. If a credit card you never applied for or a home you never owned, for example, appears on your report, you can file a dispute with the credit bureau(s) in question. The investigation and repair process can be lengthy; that's where credit repair agencies, which do legal legwork on your behalf, can actually come in handy. But you can do anything they can do for yourself — as long as you have enough time, patience and information on your hands — so don't retain the services of one unless you have a real tangled mess of an error-ridden credit history to sort out.

Source: NextAdvisor