- The Washington Times - Thursday, November 25, 2004

A new federal law that will be phased in beginning next week will allow anyone who wants to see their credit report to get at least one copy a year from each of the three major credit-reporting agencies.

The law takes effect first on the West Coast beginning Wednesday. East Coast residents will qualify for the free credit reports beginning Sept. 1.

The Fair and Accurate Credit Transactions (FACT) Act is supposed to help consumers monitor the credit records, which can control their major purchases and employment opportunities. Credit reports also can help them detect identity theft before it ruins their credit ratings for years.

“The new law empowers consumers by giving them free copies of their credit reports, along with instructions on how to improve their creditworthiness,” said Rep. Spencer Bachus, Alabama Republican, who sponsored the legislation. “Additionally, the law contains effective mechanisms to combat and minimize identity theft, which is one of America’s fastest-growing white-collar crimes.”

The District of Columbia had the most identity theft per capita last year with 123.1 cases per 100,000 residents, according to the Federal Trade Commission.

Identity theft normally refers to use of stolen credit cards or using credit-card information to open or steal from other people’s accounts. It costs consumers about $5 billion per year.

“If somebody has opened a credit-card account by using your Social Security number and is racking up bills in your name, you should do what you can to find out about it,” said Tim Murtaugh, spokesman for Virginia Attorney General Jerry Kilgore. “It takes years to repair the damage.”

Credit reports can determine whether consumers get home loans, credit cards, automobile financing and favorable insurance rates.

The free reports will be available through the Internet or by calling the three major credit-reporting services, Equifax at 800/997-2493, Experian at 800/397-3742 or Trans Union at 800/888-4213.

Maryland residents already are entitled to one free report per year under state law. The federal law will give them a second free report from each of the three major credit-reporting agencies. Residents of the District and Virginia will get one report per year from each agency.

Consumers also can receive a free report if they are denied credit because of a bad rating.

The federal law is partly a response to unregulated and variable methods used by the credit-reporting services to gather financial records from businesses.

“No state or federal law requires them to report data to the [credit-reporting] agencies or to use a particular format for their reporting,” wrote the authors of a Federal Reserve study.

“As a result, the completeness and frequency of reporting can vary,” the study said.

The FACT Act is supposed to make it easier for consumers to correct inaccuracies in their credit reports.

Other provisions will require mortgage lenders to give consumers the credit scores used to determine their loan rates and to provide notice on how the price paid for a loan or other product changed as a result of a customer’s credit history.

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