- It has been suggested that the considerable noise in single-cell responses to a stimulus can be overcome by pooling information from a large population. Theoretical studies indicated that correlations in trial-to-trial fluctuations in the responses of different neurons may limit the improvement due to pooling. Subsequent theoretical studies have suggested that inherent neuronal diversity, i.e., the heterogeneity of tuning curves and other response properties of neurons preferentially tuned to the same stimulus, can provide a means to overcome this limit. Here we study the effect of spike-count correlations and the inherent neuronal heterogeneity on the ability to extract information from large neural populations. We use electrophysiological data from the guinea pig Inferior-Colliculus to capture inherent neuronal heterogeneity and single cell statistics, and introduce response correlations artificially. To this end, we generate pseudo-population responses, based on single-cell recording of neurons responding to auditory stimuli with varying binaural correlations. Typically, when pseudo-populations are generated from single cell data, the responses within the population are statistically independent. As a result, the information content of the population will increase indefinitely with its size. In contrast, here we apply a simple algorithm that enables us to generate pseudo-population responses with variable spike-count correlations. This enables us to study the effect of neuronal correlations on the accuracy of conventional rate codes. We show that in a homogenous population, in the presence of even low-level correlations, information content is bounded. In contrast, utilizing a simple linear readout, that takes into account the natural heterogeneity, even of neurons preferentially tuned to the same stimulus, within the neural population, one can overcome the correlated noise and obtain a readout whose accuracy grows linearly with the size of the population.