Typical errors in credit reports include wrong addresses, false record of missed payments or a credit product fraudulently taken out in the account holder’s name.

Of those who spotted incorrect information, 22% didn’t do anything about it, according to the research from campaign group Which?.

If you do spot a mistake, contact the company that submitted the incorrect information or the credit reference agency which will investigate your claim.

Which? polled over 1,000 people to see if they understood their credit reports and scores but the results reveal widespread confusion.

Four in 10 have never checked their credit report and of those, half said their report and score wasn’t relevant to them.

A third mistakenly believed they would be charged a fee to check while a similar number thought checking their report could damage their credit score.

However, checking your credit report is free and doesn’t negatively impact your score.

Those surveyed were also confused about the role of credit reference agencies such as Equifax, Experian and TransUnsion, incorrectly believing they can influence the outcome of a credit application.

However, the most common myth is that credit ‘blacklists’ exist with 80% believing they could be banned from borrowing. But the reality is that lenders carry out an assessment of creditworthiness using their own criteria, which is why you may be accepted by one and rejected by another even if they use the same credit report.

One fifth (20%) of those surveyed were rejected for a credit product in the past year, and of those, nearly a quarter (22%) were surprised as they thought they had a good credit score.

Consumers also displayed a lack of understanding over what information is included in a credit report. Three quarters (72%) of those surveyed incorrectly thought council tax arrears were included and four in 10 also thought their salary (42%) and savings (41%) were included.

Jenny Ross, editor of Which? Money, said: “Credit reports help to give people more clarity over their financial health. However, our findings suggest that many are still in the dark about how their reports are compiled and used, potentially harming their ability to access credit in the future.

“Credit reference agencies and lenders must work harder to demystify the world of credit reports and scores – for example, by giving clear and constructive advice if an application is rejected, so prospective borrowers can take steps to improve their chances of being accepted in the future.”