Since the invention of the computer, civil libertarians and a good many ordinary citizens have worried that centralized databases could compile huge dossiers on them, remembering the most minute details of their lives forever.

It hasn't worked out quite that way.

In today's world, the problem is not that computers' memories are long and perfect. It is that they are long and imperfect. And it is private commercial databases, rather than a Big Brother government, that are most likely to cause difficulties in everyday life.

Last week, a congressional subcommittee began looking at proposals to deal with a set of databases that is generating a lot of consumer unrest these days -- the nation's credit bureaus.

This industry, which is dominated by three large companies, collects information on consumers' credit histories and makes it available for a fee to lenders, merchants and others who grant credit to individuals. The credit providers in turn supply reports to the bureaus on their experience with individuals.

The industry notes, correctly, that by making it easier for lenders and merchants to check on consumers, it has made it easier and cheaper for honest, financially responsible people to get credit.

But there is growing concern that credit bureaus are sloppy in managing their files and unresponsive to consumers who become victims of error. By some estimates, as many as 43 percent of the roughly 450 million credit reports on file contain at least one serious error.

"If it's your lucky day, {a} mistake won't stop you from obtaining the credit due you, and if you're very lucky, all three of the major credit bureau networks will correct your file," according to Ed Mierzwinski, author of a report on credit bureaus for U.S. Public Interest Research Group, a consumer advocacy group.

The industry argues that errors are the exception and complaints relatively rare. Retail and banking groups agree. "It is our position that when you take into account the enormous volume of account history data that is furnished to consumer reporting agencies by creditors, the system works exceedingly well," William Bloom of the National Retail Federation told the Consumer Affairs subcommittee of the House Banking Committee.

But as Rep. Richard H. Lehman (D-Calif.), chairman of the subcommittee, noted, even one-half of 1 percent of 450 million is 2.5 million. "That strikes me as a lot of inaccuracies," he said.

And consumer groups provided numerous examples of individuals who have been denied credit because of erroneous material in their files. One common error was the amalgamation of the credit histories of two people with the same or similar names.

Consumers reported instances in which they were confused with others, resulting in files that contained two different birth dates and two different Social Security numbers but that apparently raised no red flags with the credit bureau.

Indeed, Nancy L. Ross, a reporter for this newspaper, only last month recounted in an article the months of difficulty and embarrassment caused when TRW Credit Data melded her file with one belonging to another Nancy L. Ross who was in difficult financial straits and behind on many of her bills.

Although the 20-year-old federal Fair Credit Reporting Act requires the credit bureaus to provide consumers with a free copy of their credit report if they are denied credit on account of it and requires the bureaus to recheck questioned information, the consumer may be out of luck if the bureau is accurately reporting inaccurate information supplied by a merchant or lender.

The consumer must then appeal to the merchant to correct the file. While some merchants do, others seem to assume that there is no error and that the consumer is trying to weasel out of his or her debts.

"At present, consumers who know that a creditor has reported inaccurate information can trigger a reinvestigation, but have little recourse if the creditor simply confirms the misinformation," Jean Noonan of the Federal Trade Commission told the panel.

Nor can they sue, Noonan noted, unless they can show malice or willful intent to injure them -- a standard that is usually impossible to meet.

As a result, consumers are left to try to wheedle, threaten or cajole the merchants and credit bureaus into straightening things out. And even when they succeed in correcting their files at one of the Big Three -- TRW, Equifax Inc. and Trans Union Corp. -- that doesn't necessarily mean that it will be corrected at the others.

Bills pending in Congress aim to give consumers new weapons, however. Reps. Lehman, Charles Schumer (D-N.Y.) and Matthew J. Rinaldo (R-N.J.) are each sponsoring measures that would require those who furnish information to credit bureaus to maintain procedures to ensure maximum possible accuracy of the information they report, and would create a potential civil liability if incorrect data is provided.

"The proposed change would give consumers considerably more clout than they currently have in correcting false information in their files," said Noonan, who is associate director for credit practices at the FTC.

Though differing somewhat, the bills would also require bureaus to provide consumers with a free copy of their report at least once a year if the consumer wants it. Currently copies are available to consumers free only if they have been denied credit on the basis of the report. Otherwise, bureaus charge around $15 apiece ($5 in Maryland, and $8 to $10 in a few other states), and TRW Credit does a thriving business selling regular reports to consumers for $35 a year.

The bills also would restrict or eliminate other practices such as "pre-screening," in which lists of consumers with certain characteristics are gleaned from credit bureau files by bulk mailers and used to compile solicitation lists.

Next week: Tips on dealing with credit bureaus.