Free and Valuable Checkup
As the credit cards come to rest post-holiday, do yourself a favor and exercise your new right to see what kind of damage you -- or someone else -- might have done to your credit record.
The Fair and Accurate Credit Transactions Act of 2003 isn’t perfect. Congress didn’t fully protect consumers from identity theft or safeguard them from problems caused by faulty credit reports. But lawmakers did require credit reporting agencies to give Americans a free look at the reports that determine what kind of interest rates they will pay. Consumers can dispute errors and track fraudulent use of personal information that could hurt their credit ratings.
The free reports became available in California and other Western states Dec. 1 and will roll out in other parts of the country next year. The law covers only basic credit reports, not the credit scores derived from them that TransUnion, Experian and Equifax, the three major credit bureaus, make available for a fee. The report, though, is the important document.
Congress required the free reports in part because of identity theft rings that can destroy a credit rating by co-opting financial information to open bogus credit accounts. As charges on the hidden accounts mount -- and the bills aren’t paid -- innocent victims’ credit ratings are trashed. That can lead to higher interest rates as well as rejections for home loans, insurance and even a new job. Federal officials estimate the cost of identity theft to consumers and businesses at more than $50 billion during 2003. Even if the thief is caught, it’s up to victimized consumers to repair their own financial reputations. So the earlier a problem is detected, the better.
The second reason to take advantage of the free offer is that credit reporting agencies and the financial institutions, retailers and other businesses that feed billions of bits of information into the reporting systems make mistakes. So do courts and other government institutions that contribute information. So print out the credit reports, study them and contact the agencies to report errors or discrepancies.
Getting the free review is relatively simple (see below). Consumers are due a free copy of each report once every 12 months. You could view the three credit reports at one sitting to get an overall snapshot, or get one every four months to monitor your credit status year-round. Married couples (with two sets of reports between them) could do both.
To Take Action: Go to www.Annual CreditReport.com, dial (877) 322-8228 or send a written request (using the form available on the website) to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
