If you have taken out a loan to purchase a car or house recently, chances are you saw your credit score. It is the number somewhere between 300 and the mid-800s that helps determine your cost of borrowing money. Excellent credit scores yield favorable interest rates; very bad scores will result in an inability to finance anything.

Three primary agencies track financial information about you to come up with a score. Equifax, Experian and TransUnion all keep tabs of your credit card balances, mortgages, payment habits and other financial data -- or lack thereof.

While scores can vary between these major agencies, it is critical the numbers are correct. In a number of cases, according to a government study, not all are.

The Federal Trade Commission released a study this week that suggest 25 percent of consumers have an error on their credit report. In a number of the cases with errors, the individual's borrowing costs either went up or they were denied a loan.

The FTC used the report to remind consumers to monitor closely their own scores. The Consumer Data Industry Association, on the other hand, said the study confirmed credit reporting agencies were doing a great job.

"... (C)redit reports are highly accurate, and play a critical role in facilitating access to fair and affordable consumer credit," was the assessment of the CDIA, which represents the reporting agencies.

While we agree individual consumers should pay close attention to what others indicate about their financial reputation, we believe the onus should be on the agencies to improve their accuracy. One in four U.S. consumers having factual errors should be unacceptable in this day and age -- particularly given the gravity with which lending institutions consider that information.

The federal government should use these findings to demand better performance from the credit ratings agencies. As the FTC has limited investigative and enforcement powers, it is only by the creation of the Consumer Financial Protection Bureau somebody finally is monitoring the work done by the agencies. Prior to last fall, the only way the government became involved was if a complaint was lodged. The new bureau should utilize the recent report to demand reform.

Americans deserve no less. If incorrect information is used to penalize any U.S. consumer, the reporting agencies are not doing their job. That needs to change.

In the meantime, consumers should be reminded that each of the three reporting agencies are required to provide a free copy of your credit report each year. All it takes is a request.

Editorial by Patrick Lowry

plowry@dailynews.net