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Published Wednesday, June 1, 2005
Free Credit Files Available Today
Reporting bureaus must provide yearly reports by law, but you have to ask.
By JOHN HIELSCHER
New York Times Regional Newspapers
Starting today, Floridians can obtain free copies of one of their most important financial documents -- credit reports. Last year, the phasing-in of the program started in the western states, and now it's time for residents in the South to get theirs.
The no-cost reports are required by a 2003 federal law. Individual reports from the three nationwide consumer reporting companies -- Equifax, Experian and TransUnion -- typically cost about $10 each.
The Fair and Accurate Credit Transactions Act now requires each of those bureaus to provide everyone with a free copy every 12 months. But consumers must ask for it; it won't be sent automatically.
The Federal Trade Commission recommends that consumers review their credit reports from all three bureaus because each uses different databases to compile information. The three reports can be ordered all at once, or consumers can stagger them over the course of a year.
WHAT'S IN A CREDIT REPORT?
Credit reports chronicle a person's debt and payment history, detailing mortgages, car loans, credit cards and payment records. They also list any pastdue accounts, bankruptcies, foreclosures or actions by collection agencies. The bureaus collect this information and sell it to lenders and other businesses that have permission to obtain it. The free reports lack one piece of data available in the paid versions: They don't contain a person's credit score -- a number reflecting creditworthiness based on the report -- that lenders often use as a benchmark. Those can be purchased separately from each bureau for about $6 to $8.
WHO USES CREDIT REPORTS?
Lenders use the reports, along with the credit score, to decide if a potential borrower qualifies for a mortgage, a credit card or other form of credit. They also can be used to set interest rates on loans. But others use credit reports, such as landlords checking on a potential tenant's payment history or an employer considering hiring someone who will handle large sums of money.
WHY SHOULD THEY BE REVIEWED?
Credit experts say consumers should review their credit reports at least once a year. The reports may contain errors and might reveal the first evidence of identity theft.
"Consumers can use this new tool to monitor their credit, check for accuracy in their personal information, and help protect themselves from identity theft," said Lydia Parnes, director of the Federal Trade Commission's Bureau of Consumer Protection.
A 2004 survey found that 79 percent of credit reports contain some kind of error.
WHAT IF THERE ARE ERRORS?
Under the Fair Credit Reporting Act, both the credit bureau and the information provider (such as a credit card company) are responsible for correcting inaccurate or incomplete information. Contact the credit bureau online or in writing about what information you think is wrong. The bureau will contact the data provider and respond, usually within 30 days. If the company agrees, an updated report will be issued. If not, the consumer can put a written statement in the credit file.
Web address: www.annualcreditreport.com . The report will appear right away after entering information.
Request form available at the Web site and mailing it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. Reports will be mailed within 15 days of receiving form.
For more information, visit the Federal Trade Commission Web site at www.ftc.gov .
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