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Keep Our Families Safe: Consumer News For Families
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Credit Check: Know Your Number

[Column 352, August 29, 2005] | Archived Columns

By Ken Suggs*

The tagline of one credit company's advertisement asks, "What's in your wallet?" For many of us the answer is: a whole lot of plastic. "Paying with plastic" (i.e. credit cards) has become routine for most of us as a result of easy application for credit and intriguing payment plans and rates. But after years of borrowing, spending and paying, do you know how your credit stacks up?

Since December of last year, a new provision of a federal law (the Fair and Accurate Credit Transaction Act, or FACTA) has gone into effect, phasing in a plan for all people to be able to obtain their credit reports for free.

People living in the West (AK, AZ, CA, CO, HI, ID, MT, NV, NM, OR, UT, WA, and WY) benefited from the new right to a free credit report starting on December 1, 2004. More states were added on March 1, 2005 ( IL, IN, IA, KS, MI, MM, MO, NE, ND, OH, SD, and WI). Southern states (AL, AR, FL, GA, KY, LA, MS, OK, SC, TN, and TX) were recently phased in on June 1.

People in the East (CT, DE, DC, ME, MD, MA, NH, NJ, NY, NC, PA, RI, VT, VA, and WV, plus Puerto Rico and all U.S. territories) will be able to order free credit reports starting September 1, 2005.

Before this new law, Americans had to pay to get copies of their credit reports. Consumer groups advocated consumers obtain their annual credit reports from each of the nationwide credit bureaus: Equifax, Experian, and TransUnion. Those reports typically cost up to $9 each. Now, consumers can go to a new Congressionally-mandated website, www.annualcreditreport.com, to order their credit reports.

This new website is a secure site, meaning that once you type in the web address, you will be directed to a site with the prefix "https" in front of the web address. Beware of other sites that advertise "free" credit reports. These sites use tricky advertising and fine print, and you will likely end up paying for these "free" services or disclosing personal information that you don't want in strange hands.

The World Privacy Forum, a non-profit research organization focusing on technology and privacy, suggests that—even though the new annualcreditreport.com site is secure—consumers call the toll-free number to request their reports. That number is 877-322-8228. The World Privacy Forum (WPF) recommends that consumers always ask for all but the last four digits of their Social Security Number be "masked," or covered, in the report and any mailed material.

The WPF has already received feedback on the automated phone system used for ordering free credit reports. The organization suggests that if you have a complicated last name or a strong accent, it may be better to print out the credit request form and mail it in. The form is available at:
http://www.ftc.gov/bcp/conline/edcams/credit/ycr_free_reports.htm

Once you fill out the form, mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Upon receipt of your credit reports, check for errors. According to U.S. Public Interest Research Group (U.S. PIRG), "One in four credit reports contains errors serious enough to cause consumers to be denied credit, a loan, an apartment or home loan or even a job."

U.S. PIRG wants Congress and state legislatures to protect consumers' financial privacy and the accuracy of their credit reports by enabling consumers to seek help through the courts if a credit bureau or creditor fails to protect personal information or limit the use of a person's Social Security Number.

In addition to credit reports, consumers are now also entitled to have access to their credit "score," which is a number that lenders use to evaluate potential credit behavior, such as defaulting on a loan. Your score is based upon credit payment history, proximity to your credit limit, and credit status (new or longtime user).

Unlike the credit report, obtaining your credit score is not free. The Privacy Rights Clearinghouse (www.privacyrights.org) has dissected the provisions of the new FACTA and reports that consumers will be charged a "reasonable" fee to be determined by the U.S. Federal Trade Commission (FTC).

For more information about credit scores and what to do if you are denied credit, visit the FTC at http://www.ftc.gov/bcp/conline/pubs/credit/scoring.htm .

*Ken Suggs, president of the American Association for Justice, is a partner in the Columbia, SC, law firm of Janet, Jenner & Suggs.