1. Credit bureaus need to conduct real investigations.

That doesn't mean the bureaus have to open a file on every frivolous dispute. It does mean a human being should review and forward to data furnishers documentation supplied by consumers in disputes, as required by law. A human being should also review and evaluate the data provider's response to the dispute.

2. Lenders and other data providers should respond in detail to disputes.

The companies reporting credit data to the bureaus need to do more than just look at their own systems to verify a debt exists. They should be reviewing any documentation supplied by the consumer and responding specifically to the consumer's complaint. If the furnisher has proof the consumer is wrong, that should be supplied to the credit bureaus.

3. Credit bureaus should have an appeals process.

If a creditor insists on reporting incorrect information, the bureaus should do more than shrug their shoulders. An independent third party should review the investigations, and credit bureaus should have ombudsmen to ensure consumer rights are being respected.

4. If your credit is being used against you, you should see exactly what the company passing judgment on you is seeing.

When the bureaus compile reports for lenders, they often use looser criteria of what to include than when someone requests his or her own report. Rather than just giving you the right to a free credit report after an adverse credit action, the law should require that you be given the same ones the lender, landlord, insurance company or employer actually used. In some cases, that's the only way to find out if your reports are being mixed with someone else's.

5. Heftier fines need to be levied for violations of the Fair Credit Reporting Act.

Consumer advocates will tell you the bureaus and lenders don't have much incentive to delve deeply into consumer disputes. Real investigations would be expensive, and few consumers are willing or able to file lawsuits over persistent errors. So the bureaus and the lenders don't face much economic cost for not taking disputes too seriously. Change the economic incentives, and they just might.

Click here to become a fan of MSN Money on Facebook

Join the conversation and ask your financial questions on Liz Weston’s Facebook fan page.

Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.

More from Liz Weston: