> Advice For Borrowers
Free Credit Reports Come With Stiffer Credit Laws
by Broderick Perkins
It's final. Your credit report is free for the asking. In a nine-month roll-out beginning on the west coast on December 1 and spreading to the east coast by September 1, 2005, a new federal rule will let you have one free copy of your credit report from each of the three national credit reporting agencies, Experian, Equifax, and TransUnion. By law, that actually means you can get three reports each year (one from each agency) or one every four months, however you choose to break it down, but you shouldn't wait for a free copy from any agency. The less than $10 cost of a credit report is small potatoes compared to what errors on your credit report could cost you and chances are -- nearly 8 in 10 -- your credit report contains errors. "Mistakes Do Happen: A Look at Errors in Consumer Credit Reports," a recent report by public issues watchdog U.S. Public Interest Research Group (USPRIG) found that 79 percent of credit reports contain some kind of error and one in four credit reports contains an error serious enough to cause you to be denied credit. The time you need to take to correct errors could usher in higher home prices and interest rates. Hopefully, the same laws that gives you free credit reports every 12 months will also reduce the incidents of errors on your credit report. The Federal Trade Commission issued its final rule regarding free annual credit reports under the new Fair and Accurate Credit Transactions Act (FACTA) which was enacted Dec. 4, 2003 to amend the Fair Credit Reporting Act (FCRA). The updated law also contains other provisions (some approved, some pending approval) to further improve your credit life. - Also effective Dec. 1 a National Fraud Alert System will allow you to place an alert on your credit file if you have good reason to suspect you've been victimized by identity theft. Creditors will see the notice and hopefully proceed with caution.
- Credit card receipts will come with shortened or truncated account numbers so others don't have access to the full number.
- Financial institutions and creditors are developing better methods to dispose of credit report information so it is not simply left in a trash dumpster once a business no longer needs the information.
- Credit reporting agencies will stop reporting allegedly fraudulent account information once you've established you have been a victim of identity theft.
- Creditors and businesses will have to provide copies of business records of fraudulent accounts and transactions to assist you in proving you are a victim.
- You will be able to report accounts affected by identity theft directly to creditors -- in addition to credit reporting agencies -- the prevent the spread of erroneous credit information.
Under the free credit report provision, the three credit reporting agencies must establish a central location with a postal address, toll-free telephone number and Internet website where you can quickly and easily apply for your credit report. The central location must be able to accept the anticipated volume of free credit report requests, can collect only as much of your personal information necessary to process the request and may not include any advertising or marketing that interferes with, detracts from, or undermines the purpose of the centralized source. Information collected can only be used to process the free credit report, update the consumers credit file information or process a transaction you request at the same time you request a free annual report. In addition to the central location, individual credit reporting agencies must maintain a toll-free telephone number where consumers can request a free copy of their credit report every 12 months. | 
