Kate Hughes: They foul up your credit file but still financial firms play God

Being infallible is not something the financial services sector is known for. Yet if a bank or utility company, or another institution of that ilk, gets something about you wrong, the erroneous information could still be added to your credit profile.

"Only" 1 per cent of data is reported incorrectly to the credit-reference agencies, says Barry Stamp of checkmyfile.co.uk, but that equates to a staggering four million of the 400 million files collectively held by the three agencies. Mistakes can be made both by companies and by the individuals concerned but the end result is the same.

"I felt like a leper," one victim of inaccurate credit reporting told me recently. "You think you've done all the right things and you're still penalised. There's no higher power when it comes to the agencies and the information they're given."

Mr Stamp says: "With the best will in the world, everyone makes mistakes, especially when you consider the amount of data handled every day. It only takes a slight error in your address, say, and a potential lender may not be able to find your credit profile, penalising you unnecessarily."

He believes the legisla- tion in place to protect people – the Consumer Credit Act 1974, amended in 1998 as the Data Protection Act – is out of date and rendered useless by the sheer volume of information moving between financial services firms and credit agencies.

While simple errors such as an incorrect address can easily be rectified, a financial dispute with a company could do your credit record serious damage.

And that is before you discover that of the 2,200 companies that request information as part of a financial decision, only 200 are permitted in-depth access to your file. That's great for your privacy, but will lenders among the other 2,000 be prepared to do business with you?

The onus is on you to check your details. If you believe there are inaccuracies, the Data Protection Act still maintains that it is the obligation of those holding data to ensure it is accurate and up to date. You hav e the "right of conversation" with those involved if you find inaccuracies, which means they are not allowed to ignore you. The agency websites are a good place to start if there is a problem and will provide information on how to set your record straight.

You don't have to let financial firms treat you loftily. Take control of your data and force the companies you deal with to do the same.