- The Washington Times - Tuesday, October 18, 2005

It’s become much easier for Americans to monitor their credit reports and scores, and that’s giving consumers more control over borrowing costs and an added defense against credit card fraud and identity theft.

Since Sept. 1, consumers nationwide can obtain a free copy of their credit report every year from each of the three main credit-reporting agencies: Equifax, Experian and TransUnion.

The program, mandated by the Fair and Accurate Credit Transactions Act of 2003, allows consumers to go to a single Web site, www.annualcreditreport.com, where they can request their reports. Or they can call 877/322-8228.

Robin Holland, an Equinox senior vice president, said millions of Americans are using the program.

“Our inquiries are up significantly, and not necessarily because consumers found something inaccurate in their reports,” she said. “In some cases, it’s the first time the consumer saw a credit report, and they call and ask ‘What does this mean?’ or ‘Why is this included?”

The aim of the legislation was to give consumers easier access to credit reports, which track how much debt they have and how promptly they pay their bills. A clean report means a consumer likely can get a new mortgage or car loan at a good interest rate; a bad one can result in credit being denied or offered only at a high rate.

Because employers and rental agents also check credit reports, a bad report can prevent people from getting a job or the apartment they want.

Unfortunately, many Americans don’t pay much attention until it’s too late.

“Some people will leave negative stuff on their credit reports for ages instead of getting it corrected,” said Paul Richard, executive director of the Institute of Consumer Financial Education in San Diego. “Then they run into a problem, and they’re forced to be reactive rather than proactive.”

Although consumers can order their three free reports at the same time, Mr. Richard suggests they get one report from a different agency every four months so they can monitor changes throughout the year.

Carolyn Tarrant, a regional director for Money Management International, a Houston nonprofit credit-counseling agency, said consumers should look at their reports carefully.

“Make sure all your personal information is correct — your name, address, prior addresses, Social Security number, the month and date of your birth, and any employment information,” she said. “If there’s just one digit wrong in your Social Security number, for example, someone else’s credit information could appear.”

Then, she said, make sure all the information about your debts is correct. Each account will have a separate section and information about your credit limit, balance outstanding and whether you’ve been paying on time.

If the report contains accounts you didn’t open, you could be seeing signs of fraud or identity theft.

“Each report comes with a dispute form,” Miss Tarrant said. “You have the right to dispute any incorrect information. They’ll ask you for specifics, any documentation you have to prove your position, and they must respond within 30 to 45 days.”

Although consumers can get free credit reports, they still must pay to get copies of their credit scores. These three-digit numbers, ranging from about 300 to 800 and available from all the credit agencies, are designed to show a borrower’s risk rating. They are often looked at by mortgage and auto lenders before loans are issued. The lower the score, the higher the rate on a loan.

Credit scores can be ordered for $5 to $7 from the three credit-reporting agencies when free credit reports are ordered.

Here, again, consumers may not understand the importance of monitoring their scores.

A recent study by the Consumer Federation of America and Providian Financial found that about one in three Americans had checked their credit score in the preceding 12 months, an improvement from one in four a year earlier. But many didn’t understand that their borrowing and repayment behavior affected their scores.


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