Pamalicious
12-01-2004, 05:38 AM
ajc.com > Business
Law on free credit reports kicks in today
By PΙRALTE C. PAUL
The Atlanta Journal-Constitution
Published on: 11/30/04
Your credit report is the financial equivalent of a medical health chart. But many Americans aren't getting financial checkups as often as they should.
Starting Wednesday, they won't have any excuse not to. A new federal law requires the nation's three largest credit-reporting agencies Experian, TransUnion and Atlanta-based Equifax to offer consumers at least one free credit report per year. What's more, the usually combative companies have joined forces to create a national clearinghouse that makes it easier for consumers to get those reports.
The service, offered online at www.annualcreditreport.com or by calling 877-322-8228, is being rolled out in stages over the next 10 months, beginning in the West. Most consumers in the Southeast, including Georgia, will have access to the clearinghouse starting June 1. All will have access by Sept. 1.
But Georgians don't have to wait until next summer. State law already gives Georgia residents the right to two free credit reports a year.
As part of sweeping changes made last year to the federal Fair Credit Reporting Act and signed into law by President Bush last December, "specialty bureaus" also are required to give consumers one free report per year.
Specialty bureaus are agencies that collect specific types of information, such as how often you've bounced a check, filed an insurance claim or gone skydiving. Although these bureaus are not part of the clearinghouse operated by the Big Three credit bureaus, the law mandates that information collected by them also be made available to consumers starting today.
Other key provisions of the new law require:
Mortgage lenders to provide free credit scores to people who apply for mortgages.
Merchants to leave all but the last five digits of a credit card number off store receipts
Federal regulators to compile a list of "red flag" indicators common to identity theft, which financial institutions must use to lower the rate of fraud
Lenders and credit-reporting agencies to use those "red flag" indicators to take action in cases of identity theft even before someone knows he or she has been victimized or face fines.
What your credit reports say about you is important because they are used to determine what interest rate you'll be charged on a mortgage, how much you'll pay for life insurance, and whether your local grocery store will accept your personal check.
"Everything from a mortgage to car loans to credit cards and consumer loans to insurance, apartment rentals, opening utilities accounts and even employment can depend on what's in your credit report," said Brad Scriber, a spokesman for the Consumer Federation of America, a Washington-based advocacy group.
Many companies, especially credit card issuers, are monitoring credit reports more closely than ever. If you're late paying your Visa bill, the card's issuer can penalize you by tacking on a higher interest rate. And the fine print in many credit card agreements states that they can jack up your card's interest rate in some cases as high as 30 percent if you're delinquent in paying any of your creditors.
People also should monitor their credit reports for errors. A recent study by the U.S. Public Interest Research Group suggested that one in four credit reports contains serious errors such as false delinquencies and accounts that don't belong to the consumer errors that could have led to denials of credit.
Finally, people can use their credit reports to watch out for identity theft, where crooks pretend to be you and open credit card accounts or obtain loans in your name.
Last year, the Federal Trade Commission received 214,905 complaints related to identity theft, a more than sixfold increase from 2000, the year the agency began collecting such data.
In all, the FTC estimates that 27.3 million people have been victims of identity theft in the past five years. The crime costs businesses $48 billion a year and consumers about $5 billion a year.
The big three credit bureaus, which together hold files on about 90 percent of U.S. adults, fought passage of the new law. They argued that people should pay to obtain their credit files and that there were already provisions, such as denial of credit or employment, allowing them to get credit reports without paying the $9 fee each of the companies typically charges.
"I don't think there's any other time in history when Congress has mandated that a company give away its product," said David Rubinger, an Equifax spokesman.
The companies aren't saying how much revenue they expect to lose from the new law. But in response to its passage, Equifax has added an 11-cent regulatory recovery fee to the cost of every consumer report its business clients ask to see.
Law on free credit reports kicks in today
By PΙRALTE C. PAUL
The Atlanta Journal-Constitution
Published on: 11/30/04
Your credit report is the financial equivalent of a medical health chart. But many Americans aren't getting financial checkups as often as they should.
Starting Wednesday, they won't have any excuse not to. A new federal law requires the nation's three largest credit-reporting agencies Experian, TransUnion and Atlanta-based Equifax to offer consumers at least one free credit report per year. What's more, the usually combative companies have joined forces to create a national clearinghouse that makes it easier for consumers to get those reports.
The service, offered online at www.annualcreditreport.com or by calling 877-322-8228, is being rolled out in stages over the next 10 months, beginning in the West. Most consumers in the Southeast, including Georgia, will have access to the clearinghouse starting June 1. All will have access by Sept. 1.
But Georgians don't have to wait until next summer. State law already gives Georgia residents the right to two free credit reports a year.
As part of sweeping changes made last year to the federal Fair Credit Reporting Act and signed into law by President Bush last December, "specialty bureaus" also are required to give consumers one free report per year.
Specialty bureaus are agencies that collect specific types of information, such as how often you've bounced a check, filed an insurance claim or gone skydiving. Although these bureaus are not part of the clearinghouse operated by the Big Three credit bureaus, the law mandates that information collected by them also be made available to consumers starting today.
Other key provisions of the new law require:
Mortgage lenders to provide free credit scores to people who apply for mortgages.
Merchants to leave all but the last five digits of a credit card number off store receipts
Federal regulators to compile a list of "red flag" indicators common to identity theft, which financial institutions must use to lower the rate of fraud
Lenders and credit-reporting agencies to use those "red flag" indicators to take action in cases of identity theft even before someone knows he or she has been victimized or face fines.
What your credit reports say about you is important because they are used to determine what interest rate you'll be charged on a mortgage, how much you'll pay for life insurance, and whether your local grocery store will accept your personal check.
"Everything from a mortgage to car loans to credit cards and consumer loans to insurance, apartment rentals, opening utilities accounts and even employment can depend on what's in your credit report," said Brad Scriber, a spokesman for the Consumer Federation of America, a Washington-based advocacy group.
Many companies, especially credit card issuers, are monitoring credit reports more closely than ever. If you're late paying your Visa bill, the card's issuer can penalize you by tacking on a higher interest rate. And the fine print in many credit card agreements states that they can jack up your card's interest rate in some cases as high as 30 percent if you're delinquent in paying any of your creditors.
People also should monitor their credit reports for errors. A recent study by the U.S. Public Interest Research Group suggested that one in four credit reports contains serious errors such as false delinquencies and accounts that don't belong to the consumer errors that could have led to denials of credit.
Finally, people can use their credit reports to watch out for identity theft, where crooks pretend to be you and open credit card accounts or obtain loans in your name.
Last year, the Federal Trade Commission received 214,905 complaints related to identity theft, a more than sixfold increase from 2000, the year the agency began collecting such data.
In all, the FTC estimates that 27.3 million people have been victims of identity theft in the past five years. The crime costs businesses $48 billion a year and consumers about $5 billion a year.
The big three credit bureaus, which together hold files on about 90 percent of U.S. adults, fought passage of the new law. They argued that people should pay to obtain their credit files and that there were already provisions, such as denial of credit or employment, allowing them to get credit reports without paying the $9 fee each of the companies typically charges.
"I don't think there's any other time in history when Congress has mandated that a company give away its product," said David Rubinger, an Equifax spokesman.
The companies aren't saying how much revenue they expect to lose from the new law. But in response to its passage, Equifax has added an 11-cent regulatory recovery fee to the cost of every consumer report its business clients ask to see.