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| The Basics | Credit reports now free for entire U.S.
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With the East Coast finally on board, everyone can cash in on this free service. Here are 7 tips for folks in every state to avoid scams when ordering three free credit reports every year.
By MSN Money Staff
At last, everyone in the entire United States -- territories, possessions and all -- can click or call for three free credit reports a year at Annualcreditreport.com.
On Sept. 1, thanks to The Fair and Accurate Credit Transactions Act of 2003, free reports can be obtained from Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, U.S. territories and possessions.
Through the site, or by phoning the toll-free 1-877-322-8228, you can get one report each year from each of the three major credit reporting companies -- Experian, TransUnion and Equifax. (The hearing impaired can use the TDD service at 18777304104).
The law -- along with the free reports -- went into effect early in 2004 in the West. The rest of the country has been added, piece by piece. With the addition of eastern states, the process is complete.
Inside your credit report
Some anticipated a tidal wave of requests for credit reports. But one credit company providing reports says only that thousands and thousands of consumers have asked for copies of their credit sheets. No statistics are available on how many people have used the law, says Susan Henson, Experian spokeswoman.
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I can tell you that it has been very widely received, Henson said. Many thousands of consumers have taken advantage of ordering their credit reports. A TransUnion spokesman estimated that millions of requests have been filled.
Experian, Equifax and Transunion are required by the law to deliver one free report per year to every consumer requesting it. Formerly, the reports cost as much as $9 a peek.
A credit report has information about where you live, how you pay your bills and even whether you've been sued, arrested or filed for bankruptcy. This information is sold to insurers, creditors, employers and other businesses. With it, they evaluate your applications for credit, insurance, a job or renting a home. | 5 more ways to use the law | There's a lot more to the Fair and Accurate Credit Transactions Act than free credit reports. Here's a quick summary: - Uniform standards on what goes into a credit report have been made permanent. Credit-card and debit-card numbers must be hidden on store sales receipts, listing only the last five digits. Merchants have until Dec. 4, 2006, to phase out any existing registers or terminals that print full account numbers on receipts.
- A bank must tell you if it reports any negative information about you to the credit bureaus. A bank will also have to tell you if it grants you credit at less favorable terms than those received by most other consumers. Any debt collector who learns that information on a consumer's report is fraudulent must inform the creditor.
- Identity-theft victims who file police reports will be able to block fraudulent information from appearing on their credit reports.
- Once a credit bureau receives a fraud alert from a consumer, it must take steps to ensure that the consumer and not the thief will be granted credit in the future. This extra step could be something as simple as calling the phone number listed in a consumer fraud alert whenever a new application for credit pops up.
- Americans in the armed forces can place special alerts in their credit files while they are serving overseas to help minimize their chances of becoming victims of identity theft.
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Be sure to use the official site, though, because criminals and unscrupulous companies are preying on the unwary. Fake Web sites and spam have mushroomed, trying to trick the unwary into paying for something they can get for free. To get the report by mail, write to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281
Credit reports are also used by the credit bureaus to create your credit score, the three-digit number lenders typically use to gauge your creditworthiness. While reports are free, you still need to pay one of the three bureaus to see your current score.
It can be worth the trouble, as Steve Casteel, of Madison, Miss., learned when he applied for a loan with his wife, Cindy, to build a house. The bank charged the couple $60 for a credit report -- whereupon the Casteels rudely discovered that one credit report mistakenly listed an old medical bill as unpaid. It wasn't a deal-breaker on eventually getting the loan -- the snafu was "an insurance issue rather than a delinquent payment," says Casteel, a minister. But the experience pointed out to him how useful a periodic look at his report would be.
"We're certainly going to take advantage of that," Casteel says.
Accept no substitutes
These are no-strings reports. Yet, even the credit bureaus, in their advertising, use free credit reports as a way to sell you credit monitoring or a look at your credit score. Those may be valuable services, but don't be misled: You never have to pay a dime or sign up for any service or e-mail list -- as long as you go through annualcreditreport.com.
Consumers have experienced challenges, mostly thanks to companies that try to mislead them and criminals who try to defraud them.
The nonpartisan World Privacy Forum is urging consumers to use the phone rather than the computer if they have any concerns about security or privacy making an online request.
Both the phone and the mail options generally expose consumers to fewer potential hazards than the online option, says a forum paper, Second Report on AnnualCreditReport.com and Related Issues. The report says that, between just May and June this year, researchers found 233 domain name registrations using the words annual credit report in some combination or variation, or that were close misspellings of the official site annualcreditreport.com.
Many of those sites try to capitalize on confusion and get visitors to pay for credit reports or other services.
"It's happened to a lot of people," Pam Dixon, executive director of World Privacy Forum, said of the confusion. For a listing of such sites, see the forum.
Be careful
Privacy watchdogs, the FTC and the credit-reporting agencies themselves offer several pieces of advice for those who want to get their free credit report:
Be patient. If you're going to telephone or use the Web to access your credit report, expect the system to be pretty busy for a few days after Sept. 1, as more people try to access the system. Avoid frustration by waiting a few days.
Don't go overboard. Since the credit-reporting companies rely on many of the same sources to assemble a financial profile of you, ordering your credit history from each company at the same time doesn't make a lot of sense. Get a picture over the entire year by spacing out requests, one every four months, instead of ordering them all at once, so that you can see if anything changes.
Don't search. Don't go looking for your free credit report by typing "free credit report" into an Internet search engine. That can only lead to trouble. Go directly to www.annualcreditreport.com.
Write or call instead? "The bottom line is that quite a few people by hook or by crook are getting to the wrong site, so we are recommending that people either call in or mail in for their credit reports," says World Privacy Forum's Dixon. Yet even some people with hard-to-pronounce last names, or with thick accents, have reported some trouble with the automated phone system, says Dixon. Those people should write for their free report.
Be in your bill spot. Request your credit report while surrounded by your financial records, says David Rubinger, spokesman for Equifax. To verify your identity, the credit-reporting company will ask you some questions about very specific financial information (e.g. "what is the size of your mortgage?"). Fail to answer the question correctly and you will be locked out of the system and have to mail information to the credit-reporting company to verify your identity before a credit report will be released to you, says Rubinger.
Capture your info. As soon as your credit report appears on the computer screen, print it out or download it, says Rubinger. If you suddenly kick out the power cord or toggle to another screen, the credit report likely will be gone and the company won't pull it up again for you, says Rubinger.
Close your browser. Be sure to close your browser after accessing your credit report, so no one can look at the information you've accessed, advises the FTC.
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