So just why DO errors show up on your credit report?

According to MyFICO.com, errors in a person's credit report might mean their file is incomplete, contains information about another person, or any number of reasons:

Sometimes it's a simple credit report error like transposing numbers in a Social Security number.

Sometimes it's a different name. A woman gets divorced, then remarries. A man applies for a credit card using an informal name ("Pete" instead of "Peter," etc.)

Sometimes a clerical error is made. A hand-written application might be illegible by the person typing the information into a computer system.

Sometimes a bank will be bought out, and credit information appears in both records (Note: this has happened to me for a truck I had financed at a local bank ... the local bank was later bought out by a national firm. That one loan was reported as two, and the first showed never being paid off until I cleaned up my credit report and the mistaken entry was eliminated).

Sometimes payments were applied to the wrong account. Without checking your credit report, you'd never know that there was a late charge a year ago on an account, possibly a late fee you weren't even aware of.

Sometimes accounts you THOUGHT you had closed out and stopped making payments on actually are still open and are showing late fees.

Having credit report errors will not prevent you from getting credit. But errors -- whether they are your fault or not -- could effectively lower your FICO credit score. Having a low FICO credit score, in turn, could mean that you'll be paying more for refinancing your mortgage or getting a home equity loan at favorable terms.

Our suggestion: Get your free credit reports from

http://www.AnnualCreditReport.com and check them over for accuracy. We've posted free tips at http://www.how-to-fix-your-credit-report.com to help make the process go smoother for you.

Your credit score is a reflection of your own past personal credit history, it is not etched in stone. Take action to improve your credit score, and you'll see your FICO credit score start to rise and the interest rates you'll be offered on future loans begin to drop!