Smugness is not a virtue. I know that, yet I find myself waxing smug now and then, regardless. It happened just recently, when I read an article titled "11 Credit Report Myths" at

As I perused the list of myths, I chuckled smugly to myself. "Of course many of these are false -- it's clear just from the wording." As soon as you read a statement like "I can always pay someone to fix my credit," you immediately know it's false -- the "always" gives it away. Similarly, red flags like "instantly" and "automatically" make it clear that the statement is too good to be true.

In other words, while paying your debts will indeed improve your credit score, it won't do so instantly. While credit counseling can hurt you, it won't always do so. For one thing, lenders may never know. (They frequently don't look over your entire credit record, often just reviewing your three-digit credit score.) Meanwhile, as another example, while you can certainly pay someone to work on your credit standing, he or she can't necessarily "fix" or improve it. Errors can be fixed, but legitimate late payments won't just go away because you hired someone with an eraser.

The myth that seemed most likely to throw people off was the third one -- "Canceling credit cards boosts my score" -- because it's so counterintuitive. These days, it seems that every company offers its own branded credit card -- I've seen some from telecommunications giant AT&T (NYSE:T) and retailers like Disney (NYSE:DIS), Wal-Mart (NYSE:WMT), and Borders (NYSE:BGP). Even Avon (NYSE:AVP) has its own card now. It can make sense to own some of these if they're from companies you patronize significantly, if you get some cash back or other rewards from your purchases. It can also make sense to cancel some, to simplify your life. But surprisingly enough, canceling a card can lower your score, especially if it's an old one with a long history.

Bad reports
Here's the myth that got me, though: "I don't need to check my credit report if I pay my bills on time." I'm someone who pays her bills on time. And I'm not so naive to think that I can't benefit from reviewing my credit report. But I confess that I rarely feel any urgency about it, since I'm not planning on doing any major borrowing in the near future and since I assume that my credit report should be fairly accurate, as it was when I last checked it, long ago.

Here's what I learned, though:

When the Consumer Federation of America and the National Credit Reporting Association analyzed credit scores in the summer of 2002, they discovered that 78% of the files were missing a revolving account in good standing, while 33% of files lacked a mortgage account that had never been late. Twenty-nine percent contained conflicting information on how many times the consumer had been 60 days late on payments.

Wow. That's a lot of errors. The article went on to note that according to one debt expert, "80% of all credit reports have erroneous information ranging from a wrong birth date to accounts you never applied for."

Another consideration is that while you may be the most responsible of credit users, that can't keep you from becoming a victim of identity theft or credit fraud -- and that's the kind of activity you may be able to spot and stop by checking out your credit report.

So consider moseying over to our Credit Center, where you can learn how to check your credit report, among many other useful things.

The following articles can also help you:

If you've got the credit blues, check out the May issue of the Motley Fool Green Light newsletter. You'll see articles that will help you make the most of credit card rewards programs without breaking your budget. You'll also get access to back issues, discussion boards, and special reports that will save you money. Give Green Light a try today with our 30-day free trial.

Longtime Fool contributor Selena Maranjian owns shares of Wal-Mart, an Inside Value pick. Borders is also an Inside Value recommendation. Bankrate is a Rule Breakers selection. Disney is a Stock Advisor choice. The Fool has a disclosure policy.