If you've recently bought a credit report from Equifax, Experian or TransUnion, take a second look - there may be an error the bureau overlooked. 

While some errors are minor, others can prevent you from getting approved for a loan, obtaining credit and engaging in other transactions. You'd think the three biggest credit bureaus in the U.S. would have figured out a way to spot credit reporting issues, but a recent announcement from the Mississippi Attorney General suggests this isn't the case.

Big three credit bureaus face fines
According to an announcement from Mississippi Attorney General Jim Hood, Equifax, Experian and TransUnion will pay the state almost $7.2 million to settle an investigation into the agencies' credit mistakes and apparently duplicitous marketing tactics. Hood maintained that the credit bureaus failed to take the time and effort to eliminate errors in their credit reports. In some cases, they neglected to confirm whether the debts listed in consumers' credit reports were correct.

"Even worse, consumers had to fight tooth and nail to get these significant errors corrected," said Hood. "When Mississippi families were denied loans due to these errors or omissions, it was almost impossible for them to get a live person on the phone." 

The situations Hood described were not unlike Bobby Allyn's, a staff reporter for National Public Radio. In a guest post for The Washington Post, Allyn described how it took him "more than a dozen phone calls, the handiwork of a county court clerk and six weeks" ​To resolve an issue with his credit report, which falsely stated that he had two felony firearms convictions. 

How to dispute credit report errors 
So if you have an error on your credit report, what do you have to do to dispute it? The process usually takes the following steps: 

1. Make sure you get a recent report. We know, it stinks having to pay for another score, but there's a chance the bureau may have spotted the issue. 
2. List all of the errors on your credit report. Make sure your name, Social Security number and address are all correct. Look at your debts.
3. After you've identified the mistakes, file a formal dispute. Some bureaus allow you to submit disputes online. If not, they typically need something in writing. Keep in mind that you'll probably have to provide proof of an error.

If Allyn's anecdote is any indication as to what your in for, the dispute process may take a long time. If you need a loan, but don't want to provide lenders with a faulty report, what options do you have? 

Look into alternative credit reports 
An alternative credit report gathers information regarding your monthly bill payment habits. Consumers sign up for these free reports through alternative credit providers, which connect to individuals' open accounts. From there on out, the provider tracks whether consumers pay rent, utilities and phone bills on time and in full. 

It's pretty easy to get an alternative credit report, and it'll help you obtain lines of credit or loans for many businesses. Check out how alternative credit reports work to learn more.