Turned down for a credit card or a loan? Revenge is tempting. (A particularly effective payback, according to a thrice-married New York socialite, is to throw potted plants at the rebuffer's bookshelves. He'll be vacuuming for days!)

A better strategy -- at least when it comes to getting rejected for a line of credit -- is to prove the lender wrong.

Guilty until proven innocent
According to statistics, anywhere from 30% to 70% of credit reports contain blunders. The gaffes can be anything from errors of omission (not reporting a current line of credit) to out-of-date information (saying you still live at an old address) to outright inaccuracies (claiming you have a loan for which you never applied.)

The key is to make sure there's no real reason for a lender to snub your advances, by prettying up your credit report and making sure the details it contains are accurate. That means reviewing the files that all three major reporting agencies (Equifax (NYSE:EFX), Experian, and TransUnion) have on you. You can do so by taking a gander at your free credit report (real free, not "free with strings attached") at www.annualcreditreport.com.

Here, according to Fair Isaac's (NYSE:FIC) myfico.com, are the top reasons why lenders turn down loan requests (if you can bear to read further):

  • Serious delinquency.
  • Serious delinquency and public record or collection filed.
  • Derogatory public record or collection filed.
  • Time since delinquency is too recent or unknown.
  • Level of delinquency on accounts.
  • Number of accounts with delinquency.
  • Amount owed on accounts.
  • Proportion of balances to credit limits on revolving accounts is too high.
  • Length of time accounts have been established.
  • Too many accounts with balances.
  • And finally, the most dreaded: "I think of you as a brother."

Okay, I'm kidding about that last one. Still, catching and fixing the most common boo-boos doesn't have to be complicated. Here are six steps to disputing credit report errors. (None involve hurling potted plants, by the way.)

There are, of course, some credit report blemishes that can't be blamed on the dog or erroneous data entry. However, those bona-fide late payments, defaults and such needn't haunt you from here to eternity. Simply paying your bills on time and keeping your balances to less than 30% of your available credit will help speed you along the road to credit recovery. Here are seven other ways to improve your credit score ASAP.

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