One of the biggest sources of erroneous credit blotches today is fraud, often a relatively new scam called identity theft.
Fraud victims place 40,000 calls a month to a hotline at Trans Union, up from 1,400 a month in 1992, says David Van de Walle, a spokesman for the credit-reporting bureau.
In this scam, criminals obtain information about you, such as name, address, and Social Security number, and use it to open new credit accounts.
Then they charge purchases in your name and don't pay the bill.
You may find out if a bill comes to you for an account you never opened, or by getting a call from a collection agency, or by being denied credit.
Or you can preemptively check your credit report.
If you find fraudulent accounts or charges on your report, call the lenders and tell them to close the accounts.
And call all three credit bureaus to have a fraud alert added to your report. The words "FRAUD ALERT" will appear in bold at the top of your report, to warn viewers that it may be fraud-tainted.
Have them add a statement that reads: "Someone has been opening fraudulent accounts in my name. Please contact me directly at [phone number] before granting credit." Lenders will then call you before opening any new accounts.
No one is immune from such scam artists, says David Medine, associate director for credit practices at the Federal Trade Commission.
But the best way to keep thieves from getting your personal information is not to give it out:
* Never read credit-card numbers over the phone unless you've initiated the call.
* Don't divulge your Social Security number unless you know who you're giving it to and that they need it.
* Destroy any documents containing account numbers - cash machine and credit-card receipts and carbons, credit-card solicitations - before discarding them.