House May Tighten Credit Report Rules : Legislation: Proposed revisions in the Fair Credit Reporting Act are likely to address privacy and accessibility concerns.

Edward Ayuso II knows disappointment and rejection.

For years, unfavorable credit reports kept the New York accountant from getting a loan or credit card even though he paid his bills on time and had a good job.

Ayuso’s problem wasn’t all that uncommon: His credit file had been combined with that of someone with a similar name. He took days off work and spent more than a year trying to clear up the problem, almost giving up at one point.

“It was very frustrating,” the single, 30-year-old man said.

Such examples have come to the attention of Congress, which is moving to tighten controls on an industry that some critics say pays too little attention to the accuracy--and confidentiality--of the information it maintains on 90% of adult Americans.

The House consumer affairs and coinage subcommittee is considering revisions to the Fair Credit Reporting Act, which governs the credit reporting industry.

“One of the problems arises from the sheer age of the act,” said Albert Jacquez, an aide to Rep. Esteban E. Torres (D-La Puente), who chairs the subcommittee. The 20-year-old law was adopted before computers disseminated credit information by the megabyte.

These days, the credit bureaus--primarily TRW of Dallas, Equifax of Atlanta and Trans Union of Chicago--sell about 450 million credit reports to banks, department stores, finance companies and other businesses. Creditors then report back to the credit bureaus on customers’ payment records.

Jacquez said Torres will probably introduce this month proposed revisions in the Fair Credit Reporting Act that encompass provisions of three pending pieces of legislation. It will likely address privacy concerns and seek to make credit reports more accessible to consumers.

Industry officials say they do a difficult job very well, considering the volume of information they handle and the millions of unique circumstances they deal with daily.

“As desirable as it may be to have no incomplete or inaccurate information, this utopian state cannot be achieved in today’s marketplace,” Walter Kurth, president of Associated Credit Bureaus, the credit industry’s trade association, said during a House committee hearing in June.

Part of the problem with accuracy, he noted, is that credit bureaus must try to determine whether people with like names, addresses and Social Security numbers might be the same person.

In sorting out that information, mistakes are made.

That’s what happened to Ayuso, whose file was confused with someone with a similar name.

“We do not deny that there are errors and we, information being our product, understand as well as anybody the great importance of the accuracy of the information,” said spokeswoman Tina Buckholtz of Equifax.

She said that while the company is “doing everything we can” to ensure the accuracy of its reports, consumers and creditor grantors also must help maintain the integrity of the information.

One important thing for consumers to do, she said, is to make sure they always use the exact same name when applying for credit and make sure their Social Security numbers are accurate.

Some states are trying to force credit bureaus to clean up the files. In July, six state attorneys general sued TRW, accusing the company of making errors that harmed the credit ratings of thousands of consumers. It also alleged that TRW violated consumer privacy laws.

In a lawsuit filed in Dallas, the states of Alabama, California, Idaho, Michigan and Texas said TRW failed to correct inaccurate data.

TRW retaliated with lawsuits of its own against New York and Texas. The company said it met “not only the letter but the spirit of the law.”