5 Credit-Report Errors That Trip You Up

BOSTON ( TheStreet) -- At a time when banks are pickier than ever about issuing loans, Americans seem to be more obsessed than ever about their credit scores.

Unfortunately, they don't always pay attention to the information that determines the credit score -- namely, the credit report. That's too bad because credit reports sometimes contain errors that hurt your credit score.

According to a 2004 report by U.S. PIRG, "Mistakes Do Happen," a quarter of the credit reports surveyed by the group contained serious errors, such as inaccurate delinquencies or accounts that didn't belong to the consumer. Quizzle.com, a money-management site with more than half a million subscribers, helps consumers process between 2,000 and 5,000 credit report disputes a month, according to Quizzle officials in Livonia, Mich.

"I always tell people that there's a difference between getting your credit report and understanding your credit report," says Gail Cunningham, a spokesperson for the National Foundation for Credit Counseling in Silver Spring, Md. "You've got to make sure that it is reported correctly."

The three major credit-reporting bureaus -- TransUnion, Experian ( EXPN) and Equifax ( EFX) -- are each required, by law, to provide consumers with one free credit report a year. And all three firms provide online forms and customer-service representatives to help consumers dispute errors in those reports. The mistakes include:

1. Inaccurate delinquencies

It's worthwhile to comb through the report for discrepancies regarding late payments, as 35% of a credit score calculation is based on whether you pay your bills on time. More importantly, look for references to debt you never accrued in the first place, especially medical debt.

"One of the highest-growing crimes is identity theft, and within identity theft, one of the biggest crimes is medical identity theft," says Todd Albery, chief executive officer of Quizzle. About 1.5 million Americans with a credit history have been victimized by this crime, in which someone steals the identity of the victim in order to afford medical care, according to a recent report by The Ponemon Institute, and more than half of them didn't know they were victims until more than a year after the crime occurred.

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