A transposed Social Security number. One woman's financial information intertwined with her sister's. Late payments from long ago that live on as a low credit score.

These are among errors and issues Seattle Times readers have encountered as they picked through their credit reports recently.

Last month, Washington became one of the first states where residents are eligible to receive a free annual credit report from each of the three major credit bureaus: Equifax, Experian and TransUnion.

For some people, it was the first time they had ever seen their credit information: a detailed financial record used by lenders, landlords, cellphone companies and others to decide whether to extend credit, accept a new tenant, even make a job offer.

"It's very eye-opening," said Norma Garcia of Consumers Union. "When the public realizes how the information is tied to so many things in their lives, they're going to make noise about the things that don't work."

Yes, they are.

More than three dozen readers wrote or called us to ask questions or express concerns about what they found recently in their credit files.

Some were startled to see all the details of their financial lives laid bare. Others were aggravated by how difficult it was to fix an error or wondered how to raise their credit score.

Below you'll find answers to a selection of reader questions:

Interpreting your credit report

And improving your credit picture

Q: How can I improve my credit standing? Is it bad to have too many open accounts, to pay off debt too quickly, to apply for too much credit?

A: "If you have a lot of credit outstanding compared to your limits, or if you pay late — those are the worst things you can do," said Ed Mierzwinski of U.S. PIRG, the national office for WashPIRG, the Washington State Public Interest Research Group.

Here's what credit bureaus and consumer advocates suggest to build a good credit score:

• Pay your bills on time; late payments, collections and bankruptcies have the greatest negative impact on your credit score.

• Keep your account balances below 50 percent of your available credit — a $500 balance on a card with a credit limit of $1,000, for example. Pay down credit balances with what you can afford (more than just the monthly minimum, if possible).

• Close some old or inactive accounts if you have quite a few open — but don't close the oldest accounts listed. That helps establish your history of active credit use.

• Watch the frequency of credit applications. A large number of applications for credit may prompt a large number of "hard inquiries" by lenders for your credit report. And that may signal that you're having money troubles or overextending yourself.

However, applying for the same kind of credit in a short amount of time — say, if you're shopping for a good deal on a car — is not supposed to weigh against you.

Q: But I heard it's good to carry some debt so lenders can see you handle it responsibly.

A: While it's generally good advice to pay off your credit cards, Garcia said young married couples with just a mortgage might want to carry a small balance on a credit card and pay it off regularly so their record reflects more than just their mortgage history.

And younger people just starting out with credit may want to be particularly careful about paying bills on time and not applying for too much credit until they've established a track record of managing the debt they already have.

Q: If I pay off an old debt, will that add a certain number of points to my score?

A: Each credit bureau uses a slightly different process for deriving its credit scores — complex algorithms that take into account hundreds of factors. That makes it hard to say exactly how many points will be gained or lost by changing one factor.

Key factors influencing your credit score: number and severity of late payments; type, number and age of accounts; total debt; and recent inquiries.

Credit scores do not reflect: your race, gender or marital status; your age, occupation or employment history; your salary or amount of savings.

Q: Is it a good idea to close old accounts?

A: There's no straightforward answer to this one. This may be a good idea for some — the idle accounts may be charging you unnecessary fees, or they may present a target for identity thieves.

TransUnion recommends keeping four to six credit accounts open "to keep your credit score and debt balances healthy."

But closing old accounts also can have a negative impact on your credit score by making your credit history appear shorter than it is. And if you consolidate too much debt onto a single card and push the balance above 50 percent of your available limit, you could see a drop in your score.

"There is a benefit to having managed your credit well over time," said Brad Scriber with the Consumer Federation of America.

Q: What if I have trouble getting my accounts to show as closed?

A: Even if you decide to close some accounts, it may not be easy. Some readers report having trouble getting the credit bureaus to accurately show closed accounts.

Another reader said her creditors were the ones who gave her trouble, telling her the old accounts had been "deactivated and purged" and thus couldn't be closed. She said she was forced to write each creditor individually and demand that they make a special notation — "closed at the request of the consumer."

The safest way, says TransUnion, is to send a certified letter to the customer-service department of the creditor. You should receive confirmation that the account was closed within 10 days.

Q: If you have a bad credit spell — a period where you didn't pay on time or ran up big bills — how long should it take for your credit score to recover?

A: "You can't erase your credit history," Equifax spokesman David Rubinger said. Most information stays on your credit report for seven years. That includes late payments, collections and small-claims judgments. Bankruptcies stay on for 10 years. Unpaid tax liens remain for 15 years.

"Hard inquiries" from creditors or lenders when you've applied for credit stay on two years and can cause a drop in your credit score if there are too many.

(It's considered a "soft inquiry" when you look at your own credit report or if a company looks at it to make you an unsolicited promotional offer; these inquiries don't affect your credit score.)

But time is on your side. It's your most recent credit history that carries the most weight.

Fixing errors

And they're not unusual

One-quarter of credit reports contain errors serious enough to cause consumers to be denied credit, a loan or a job, according to one study released last summer by the U.S. Public Interest Research Group. (Credit bureaus dispute this, saying the study was too small to be accurate and questioning U.S. PIRG's definition of a serious error.)

Q: When should you dispute an error, and when should you just ignore it?

A: Mistakes that reflect on how you manage money and debt need your attention. "Any time you see any debt listed, outstanding balances — any sort of delinquent account can really hurt your credit," said Jen Schwartzman, Federal Trade Commission spokeswoman.

Positive payment history — when you've paid off a loan, for example — should show up accurately so your file reflects not just timely payments but also debts successfully paid off, Garcia said.

For minor mistakes, experts give conflicting advice. The FTC and consumer advocates say your whole credit file should be as accurate as possible.

However, Rubinger says some of the information, such as your place of employment, isn't used in calculating your credit score, and it may be less important to fix it.

Q: How can I dispute an error or information that's out of date?

A: The credit bureaus and your creditors have an obligation under the federal Fair Credit Reporting Act to provide correct and complete information. According to the FTC:

First, write to both the credit bureau and the bank or creditor, including copies (not originals) of documents that support your position. You can include a copy of your credit report with the error circled. Send your letters by certified mail, and keep copies for yourself.

The credit bureau must investigate the item in question within 30 to 45 days, unless it deems the complaint frivolous. And they must pass on relevant data you provide to the original source of the information.

The information provider must do its own investigation and report back to the credit bureau. If an error is found, it must notify all nationwide credit bureaus to correct it. If disputed information can't be verified, it must be deleted from your file.

When the investigation is complete, the credit bureau must inform you in writing and provide a free copy of your report if the dispute resulted in changes.

Q: Aren't there any shortcuts?

A: Though the system for complaining may feel unwieldy, it's important to go through the motions because the credit bureaus are "very bureaucratic," Mierzwinski said.

Keep your complaint short and precise. If you speak to someone with the credit bureau or the lender about the problem, make sure you keep notes about the person's name and direct phone number so you can follow up, Garcia said.

And if you are in the process of getting a mortgage and find a credit-report error, you should ask about "rapid rescoring," said Scriber. It's a process for getting an independent credit-reporting company, working for the lender, to intervene and help you quickly fix an error that may prevent you from getting the best interest rate or terms on a mortgage.

Q: What if I challenge something and provide proof, but it still shows up inaccurately?

A: Then it may be time to make your dispute public.

Consumer advocates recommend filing a complaint with the FTC and/or the state attorney general's office. (The FTC doesn't sort out individual complaints, but it is keeping tabs on the number and type of complaints it receives about the credit-reporting system.) Then send a copy of those complaints to the credit bureau or creditor.

You might even send a copy to your U.S. senator or representative. "Anything you can do to make yourself stand out will probably benefit you," Scriber said.

Q: And if that doesn't work?

A: If your dispute can't be resolved, you have the option of adding a consumer statement to your credit file — a brief account in your own words telling your side of the story. Bear in mind, though, that anyone who has access to your credit file, from creditors to potential employers, could see that statement.

Be prepared to be pushy, warns Mierzwinski. The "Big Three" credit bureaus, as they are sometimes called, "have very sloppy practices in terms of accuracy and a disdain for customer service," he said.

Safeguarding your personal information

And limiting who sees it

Q: How safe is all this personal information collected by the credit bureaus?

A: The rules governing who has access to the information and how it can be used are pretty strict. Among those with a legal right to see your information: creditors, insurers, employers (usually they must have your permission) and other businesses evaluating your applications for credit, insurance, employment or renting a home.

The Fair Credit Reporting Act "is our oldest and strongest privacy law," Mierzwinski said, and it requires companies or individuals to have a permissible business purpose for looking at your information. It also imposes hefty penalties for misuse of the information.

Q: Is there a way to limit who is allowed to look at my credit file?

A: Yes, you can choose to opt out of receiving solicitations for credit cards, insurance and other offers.

To opt out of prescreened offers generated by information from all the national credit bureaus, call 888-5-OPTOUT (888-567-8688), or go online: www.optoutprescreen.com.

Jolayne Houtz: jhoutz@seattletimes.com and 206-464-3122