Consumer Windfall: Three Free Credit Reports A Year
by Broderick Perkins
Thanks to the way provisions in a new federal regulation are being administered, you can keep tabs on your credit report more frequently than consumer experts typically advise -- and you can do it for free, beginning today if you live in the West. "For the many consumers living month-to-month on consumer debt (about 55 percent of all credit card holders carry such debt), being able to get a free copy of a credit report will induce many more people to get a copy," said Eric Tyson, a New England-based personal finance counselor and author of Personal Finance for Dummies (John P. Wiley) and co-author of Mortgages for Dummies (John P. Wiley). Most experts advise pulling a credit report at least once a year, but with the growth in identity theft and credit scams, experts more often suggest more frequent look-sees -- especially if you are an active credit user. What's more, there's a one-in-four chance your credit report contains an error serious enough to cause you to be denied credit, according to "Mistakes Do Happen: A Look at Errors in Consumer Credit Reports," released earlier this year by public issues watchdog U.S. Public Interest Research Group (USPRIG). "Once a year is a great start, but with the prevalence of identity theft today, smart consumers will want to consider a credit monitoring service," says Sarasota, FL's Gerri Detweiler, author of The Ultimate Credit Handbook (Plume, $15). A monitoring service automatically delivers your credit report to you as frequently as you wish, however, it will cost you. Beginning today, Wednesday, Dec. 1, for millions of consumers, that cost will disappear because they will have free access to several credit reports a year. One free credit report, each year, from each credit reporting agency -- Equifax, Experian and TransUnion -- is among the many provisions of the Fair and Accurate Credit Transactions Act (FACTA), enacted Dec. 4, 2003 to amend the Fair Credit Reporting Act (FCRA). Colorado, Georgia, Maryland, Massachusetts, New Jersey and Vermont already have varying laws on the books that mandate one free credit report per year. Credit reports track credit consumers' payment records on individual credit accounts and reveal how well or how poorly each account is being paid. The reports also document credit requests and notices of liens, judgments and other "derogatory" remarks as well as remarks from the consumer, among other information. "Lenders analyze many factors to qualify your loan including creditworthiness and rating. Both can affect your interest rate and the programs available to you," said Janet Houde, a San Jose, CA independent real estate broker and president of the Santa Clara County Association of Realtors. The three credit bureaus charged with administering provisions of the new federal law have created free annual credit report access with the option to order one bureau's report at a time -- or three over the course of a year. The online service at AnnualCreditReport.com gives you immediate access to your report, but you also can call or write for the service at (877) 322-8228 and Annual Credit Report Service, P.O.Box 105281, Atlanta, GA 30348-5281. Anyone in the market for credit, say to buy a home in the next year, can have several free looks to keep tabs on their credit report over time and in plenty of time before he or she actually applies for a mortgage. It will also give consumers a look at how the reports vary from one bureau to the next. "You could check through a different credit bureau company each time as there may be differences. In addition to checking for errors, you should also look for identity theft stuff -- someone may be taking out credit in your name without your knowing it," said Tyson. Unfortunately, right now the free reports provision only applies to the approximate 70 million people in 12 western states who enjoy the law's first rollout beginning Wednesday, Dec. 1, 2004. That will be followed by a March 1, 2005 rollout in the Midwest; June 1, 2005 in the South and finally Sept. 1, 2005 in the Eastern states and U.S. territories. For those who aren't in the first rollout, you can stick with the experts' advise and keep tabs on your credit report, which has been free for years if you are denied credit, if you want to challenge an entry because of fraud, if you are unemployed or if you are on welfare. Otherwise, there's a relatively low cost of $9 or less. "Next to cash in the bank, a credit report is one of your most valuable assets. It will affect your financial life in many ways, including the rates you pay for loans and insurance, whether you get that cell phone you want, and in the not-too-distant future, what your electric bills and other bills cost," said Detweiler. | 
