Credit report free with new law

Washington-area residents can get free copies of their credit reports beginning Thursday under federal legislation passed in 2003.

The Fair and Accurate Credit Transactions Act is intended to help consumers protect themselves from identity theft and to encourage financial responsibility.

All three of the national credit bureaus — Experian, TransUnion and Equifax — are making the reports available online at www.annualcreditreport.com, by calling 877/322-8228, or by mail.

The reports give a history of how much money consumers owe and how prompt they are at repaying debts. They can determine whether someone gets a mortgage, automobile loan, job or credit card.

“It’s something consumers should be really aware of,” said Cheryl Crispen, spokeswoman for the Mortgage Bankers Association, a trade association of lending organizations.

The federal government has been phasing in its program of free reports in four stages to avoid overwhelming credit agencies with requests. The reports have been available on the West Coast since Dec. 1.

Beginning Thursday, they will be available free once per year from each major credit agency in 14 East Coast states, the District of Columbia and all U.S. territories.

The reports normally cost about $9 apiece. For more than one report per year from each credit agency, consumers will need to pay the standard rate. They also will need to pay standard fees for credit scores, a single number ranging from 350 to 850 that rates a consumer’s risk to lenders.

In addition to telling consumers their creditworthiness, credit reports can reveal identity theft or errors by financial institutions.

“Knowing your credit score is obviously one of your best defenses,” Mrs. Crispen said.

A study released last year by the U.S. Public Interest Research Group said one in four credit reports contains errors that could cause denial of credit.

Common errors include incorrect addresses, inaccurate reports of late payments and credit accounts opened by someone else, which can indicate identity theft.

Unpaid bills typically stay on a credit report for seven years. Bankruptcies will be listed for 10 years and tax liens for as many as 15 years.

Consumers Union, a nonprofit consumer group, recommends checking the reports every four months.

“First, to find if out if there are any mistakes; second, to watch for identify theft,” said Gail Hillebrand, Consumers Union senior attorney.

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