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More free credit reports available June 1

By Michael Davis

A federal law being rolled out across the country this year will allow consumers to obtain one free credit report each year from each of the three reporting bureaus by the end of the year. But when the law goes into effect in Georgia next week, it will be icing on the cake, consumer advocates say.

In Georgia, a law has been in place for years to allow residents two free annual credit reports from each bureau – Experian, Equifax and TransUnion.

Consumer Credit Counseling Service spokesman Todd Mark says this allows consumers to monitor their own credit without having to pay an outside service.

"It's one of the most consumer-friendly laws in our state," he said.

As reports of sensitive personal and financial information stored on databases being compromised grow more frequent, Mark said its more important for individuals to make sure their credit reports are accurate.

"How many stories have you seen lately where someone's information has been stolen from a third-party collector?" he said.

For businesses that handle sensitive credit application information, like car dealers, safeguarding that information has taken on more importance.

"We shred the credit bureau (report) itself and keep the application upstairs under lock and key for five years," said Jim Hitchcock, a general sales manager at Allan Vigil Ford in Morrow.

While the dealership doesn't extend credit itself, it collects the information third-party creditors use to decide whether to loan a car buyer money.

"It's a real, real sensitive issue for anyone who handles credit on a regular basis," he said. "Which we do."

Monday, New Jersey authorities said the financial records of nearly 700,000 bank customers may have been stolen by bank employees there. A spokeswoman for Bank of America Corp., one of the banks targeted, said at the time there was no evidence any of its customers' information was used in account fraud or identity theft, but at least 60,000 were notified that their names were found on computer disks found by police.

Where to go

Under the new federal law, the Fair and Accurate Credit Transactions (FACT) Act, which goes into effect in the southern region of the United States June 1, consumers can obtain one free credit report each year through a single source via phone, mail or Internet at http://www.annualcreditreport.com.

On the site, consumers can choose which of the three bureaus from which they want a report.

But while the information that makes up a credit score – credit reports – will be free, the scores themselves, which financial institutions use to determine credit risk, won't be.

"We typically like to see it around 640 before we will consider granting credit or doing a loan for someone," said Vickie Loper, an assistant vice-president at Park Avenue Bank in Henry County.

While each bureau's scales are slightly different, Consumer Credit Counseling Services' Mark said if the information on each report is consistent, each score should be in the same range.

Just because information on your credit report doesn't match up with what you know to be true, doesn't always mean you've been the victim of identity theft or fraud, Mark said.

Because credit reporting bureaus cull information from a variety of sources, mistakes in addresses, social security numbers and other information may occur.

"If there's information that doesn't jive up, you shouldn't assume you've been victimized," he said.

If information appears on your credit report inaccurately, it can be disputed through the reporting agency issuing the report. "They have 30 days to review it and if it's not verified, it's removed," Mark said.

What credit affects

Aside from home and car loans and credit card rates, having a good credit record affects of number of aspects in everyone's life, said CCCS' Mark.

Not only does having "good" or "excellent" credit reduce one's interest on loans and credit cards, it can also affect the amount of credit issued. Even landlords check credit.

But more and more, Mark said, credit is creeping into other areas.

While they can not without your permission, "most employers are asking to pull credit reports as part of the application process," he said. "If you've got a lot of debt, you might be a greater risk to defraud the company."

Credit standing is also affecting insurance coverage.

Insurance companies, he said, are also using credit status when writing policies on homes and cars.

"If you're somebody with a lot of debt, you are much more likely to make a claim," Mark said.

Protecting yourself

While personal information stored in company databases is surely a target, credit bureaus and financial institutions say there are ways to make sure crooks don't get their hands on your information through your own carelessness.

Mostly, they say, consumers should destroy paper financial records that contain sensitive information through shredding. And that social security numbers, which are often used to verify identity, should not be placed on any document – especially drivers licenses – unless legally required.

Computer scams that use e-mail messages that appear to come from financial institutions that ask to "verify" information should also be avoided.

Never submit identifying information over the phone or via the Internet unless you initiate the call or transaction.

The Associated Press contributed to this article.

On the net:

Annual Credit Report

http://www.annualcreditreport.com

Equifax

http://www.equifax.com

Experian

http://www.experian.com

TransUnion

http://www.transunion.com