Erica Alvarezs life was turned upside down in 2011, when a handful of overdue hospital bills showed up on her credit report. Interest rates for her credit cards skyrocketed. She got turned down for a car loan, an apartment and multiple student loans.

But Alvarez, a 29-year-old doctor and resident of Washington, D.C., says the bills arent hers. She says the charges are from the maternity ward of a hospital in Texas that shes never been to.

Whats more, Alvarez has never given birth.

Outstanding debts on your credit report damage your credit rating, that three-digit number that plays a key role in many Americans' financial lives. Lenders, creditors, insurers, landlords and utility companies use your credit rating to determine how financially responsible you are. A bad rating can mean you'll have to pay thousands of dollars more to borrow money.

Studies have found that tens of millions of Americans have mistakes on their reports . And those errors can be long-lived. A study by the Federal Trade Commission released last week found that about 12 percent of all U.S. consumers dispute items on their reports that they believe to be inaccurate, but never see those inaccuracies fixed . Consumer advocates say thats because the credit bureaus, which build your credit report, dont try hard enough to correct mistakes.

Furnishers are businesses that deliver information about how well you pay your bills to hundreds of consumer reporting agencies across the country, including the Big Three -- that is, TransUnion, Experian and Equifax, which each have more than 200 million files on people . Furnishers include loan companies, utility providers and debt collectors.

It was a collection agency called Paramount Recovery Systems that allegedly told the nations biggest credit bureaus about how Alvarez supposedly owed more than $1,000 in hospital bills. Debt collectors like Paramount Recovery Systems buy old debts by the thousands -- mostly from creditors and lenders, like credit card companies, that have given up trying to collect them -- and the information that comes along with the bundles of old bills they buy is often scarce . Sometimes, its just plain wrong . Federal regulators say that debt collectors are responsible for more disputes than any other group that provides the information that makes up credit reports.

Mark McLean, the owner of Paramount Recovery Systems, declined to comment to HuffPost, citing pending litigation.

But not all the blame lies with debt collectors and the other companies that provide information about people to credit bureaus. It rests also with the bureaus themselves, consumer advocates say, for uncritically accepting what data furnishers tell them. Advocates say the bureaus often dont conduct a reasonable investigation into disputes, even though federal law says they must .

The credit reporting dispute system is a travesty of justice, said Chi Chi Wu, a staff attorney at the National Consumer Law Center, in testimony before Congress in September. It is a perfunctory process that consists of nothing more than forwarding the consumers dispute to the furnisher, and parroting whatever the furnisher states in response.

Marie Asgian, 49, knows this better than most. She had a perfect credit history until two years ago, when she noticed that civil judgments for $19,000 worth of debt had started appearing on her Experian credit report.

Having never been sued over a debt, Asgian was perplexed. Her Experian report listed the case numbers for the court judgments, so she took it upon herself to dig through public records until she found the judgments in question. The records she found said the $19,000 in debt was actually owed by someone named MaryAnn Haverland, who lived in Sibley County, Minnesota -- more than an hours drive from Minneapolis, where Asgian lives.

Asgian had, however, gotten junk mail for Haverland before, so she figured thered been a simple mix-up. Over the course of several months, she disputed the debts with Experian multiple times, even sending Experian copies of the court records, the case numbers of which matched the ones on her credit report. But each time she did so, she said, Experian would respond simply by saying its information was correct.

I felt like I was being held captive for someone elses crimes, Asgian told The Huffington Post. She applied for a credit card and was denied. She badly needed a new car, but was afraid of what would happen if she tried to apply for an auto loan.

Her case mirrors that of Alvarez, the doctor in Washington, D.C. Alvarez also disputed her report with the credit bureaus -- all three of which, she says, were reporting false information about her finances. None of Alvarezs disputes got her anywhere, despite the reams of documents she sent them to demonstrate that the hospital bills werent hers.

Both Asgian and Alvarez ended up suing the credit bureaus for not properly investigating their disputes. Both cases are still ongoing. Experian and TransUnion each declined to comment on the lawsuits. Equifax did not respond to a request for comment. Experian spokeswoman Susan Henson said more than 77 percent of disputes are resolved within 20 days. She added that disputes to the agency have fallen 42 percent since 2008.

The credit reporting industry says it takes pains to properly investigate consumer disputes.

Our surveys of consumers show that 95 percent are satisfied with the work of the credit bureau... when it comes to the dispute process, said Norm Magnuson of the Consumer Data Industry Association (CDIA), a trade organization for 200 U.S. consumer reporting companies.

Magnuson also said that in 2013, CDIA members updated the automated system by which they forward consumer disputes to data furnishers, thereby making it easier to send documents or other materials that people say support their claims. Manguson told HuffPost that capability wasnt in place when the Federal Trade Commission began its study that would eventually find many disputes never get resolved.

Such changes might reduce the error rates on credit reports. But consumer advocates say the credit bureaus updated technology won't be enough to fix the problem. The underlying issue, they say, is that the credit bureaus are inherently biased against the little guy.

Lenders and creditors are the ones paying the credit bureaus bills, according to advocates, and those companies want to know absolutely everything about a person before lending them any money. Theyd rather err on the side of having too much information about someone, even if some of that information is wrong, said Louis Hyman, a credit reporting historian and law professor at Cornell University.

They want to make sure youre responsible, and if theres a shadow of a doubt you were once late on a bill, they want to know that," Hyman told HuffPost. "Theres just no incentive to ever side with the consumer.