Credit report errors could lead to a bad FICO score

Credit report errors could lead to a bad FICO scorePoor spending habits and carelessness for paying bills on time can result in bad credit history, but even those who religiously stay on top of their financial game can end up with a low credit score if they don't keep up with their credit reports. It is very important to stay up-to-date with this personal information, as there could be errors that cause the detriment of your FICO score.

"A survey by the U.S. Public Interest Research Group found that 25 percent of reports have serious errors, 30 percent listed 'old' accounts that should have been deleted and 29 percent overall had some sort of mistake," says financial advisor Suze Orman.

These errors can prevent you from securing car loans or good mortgage rates if they go unnoticed. You are entitled to a free credit report from each of the three major credit bureaus – Experian, TransUnion and Equifax – and it would be crazy not to check them out.

If you find a mistake on your credit report, such as an unauthorized charge, file a dispute with the bureau immediately, but remember that it may take a while for your claim to be resolved. If the business in question stands behind the legitimacy of the charge, the borrower must deal with the company itself.