The Information Commissioner's Office (ICO) says incorrect information on borrowers' credit files could stop them getting future credit.
It is urging consumers to check that their credit reference file is accurate or risk having loan and credit card applications rejected (see the Credit Rating guide on how to do this for free).
The ICO was asked by the Treasury Select Committee last month to investigate whether information held by credit reference agencies, which is viewed by lenders when you apply for credit to determine your ability to repay, is indeed accurate.
That probe is still ongoing but the ICO's comments in its press release today suggest its study could be yielding disappointing initial results.
David Smith, deputy commissioner at the ICO, says: "Out of date or wrong information in your credit file might not only stop you getting the credit you need but could have further damaging or embarrassing consequences.
"By checking your credit file regularly you can spot anything that's wrong and act swiftly to correct it."
The Treasury Committee was investigating the wider issue of whether consumers are penalised when applying for credit, inspired by a MoneySavingExpert.com suggestion, because shopping around for credit can harm your credit score (see the Treasury credit probe MSE News story).
Further reading/Key link
Improve your profile: Credit Rating
Top deals: Cheap Loans, Balance Transfer Cards, 0% Cards