Most Americans are aware that any time they try to borrow money, the lender consults with a credit report outlining the borrower's credit history. These reports are prepared by the major credit bureaus ? Experian, Equifax and Trans Union, and the reports, along with the accompanying credit score, contain a distillation of the borrower's entire financial history. Armed with that information, the lender can make a decision as to whether granting a loan or credit would be wise. What many Americans don't know is that most credit reports contain errors. Worse, it can take months or even years to correct those problems. In the meantime, the errors may prevent the borrower from obtaining a loan or credit.

A recent study shows that nearly four out of five credit reports contain errors. Worse, roughly one in four contains an error that is serious enough to prevent the individual from obtaining credit or borrowing money. Most of these errors are minor they may simply consist of an incorrect address, phone number or perhaps date of birth. Others can be more serious, such as listing a paid loan as being in default, or including information from another person's credit history. These types of problems can be serious, as they can adversely affect the credit score of the individual involved. The lower the credit score, the harder it is to obtain credit or to get a loan at a favorable interest rate.

According to the Fair Credit Reporting Act, consumers are supposed to be able to fix these problems quickly, but it often doesn't work out that way. Sometimes, even if the person has proof that the information contained in the report is wrong, the bureaus are reluctant to correct it. A reason often given is that the bureaus would prefer to believe the lenders who provided the information rather than the consumer adversely affected by it.

The best way to avoid such credit report problems is to check your credit report regularly and to report problems or incorrect information immediately. You can do this, for free, by visiting http://www.annualcreditreport.com, a Website that allows Americans to obtain one free credit report per year from each of the three major credit bureaus.

?Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to establishing credit, debt consolidation and credit counseling.