Every consumer has the right to a free credit report annually, yet not everyone takes advantage of this legal protection.

Every consumer should, financial advisers say.

"It's a good idea to do once a year and prior to obtaining credit," said Mark Higgins, vice president of American Credit Counseling Services in Plainville.

Checking your report, he said, is a good way of making sure that your credit is in good standing before applying for a mortgage, car loan or credit card.

It's also a way of keeping tabs on identity theft because any fraudulent use of your credit will show up on the report. "Monitoring your report is huge," Higgins said. "Make sure your identity has not been stolen."

Massachusetts residents have long had the right to a free credit report annually from each of the three national reporting companies - Equifax, Experian and Trans Union - and now a federal law guarantees that right to every adult in the country.

Obtaining the report is easy. Just go online to www.annualcreditreport.com and complete the form to order the report, which will show up on the screen almost immediately. Or you can call 1-877-322-8228 and have the report mailed to you.

A report should be requested from each of the reporting companies because each one collects information from different sources and that can result in variations.

The reports are now easier to understand. Higgins said reporting companies have responded to requests from consumers and have simplified the information, and are providing instructions on how to read it.

If the report has incorrect information, you can inform the reporting company, which must then investigate, correct the report and send you the results.

Consumers can also contact the creditor directly to dispute the information being provided to reporting companies.

If you disagree with the results of the investigation, you can file a statement that has to be included with your credit report.

Correcting the report is important because any negative information can be included for seven years, and bankruptcy can be reported for 10 years.

The national reporting companies also sell information in your report to entities that have access rights under federal law. That can include creditors, insurers and businesses that are reviewing your applications. When seeking copies of your credit report, be sure to avoid imposter Web sites that claim to offer free services but that are not part of the federal reporting program and may have strings attached, such as hidden fees.

Use only the official Web site at www.annualcreditreport.com, which also provides information on federal laws.

Additional information can also be obtained at www.ftc.gov, and in Massachusetts at www.mass.gov/consumer.