Beginning today, all consumers living in the U.S. have the right to order a free copy of their credit report thanks to a new federal law, known as the Fair and Accurate Credit Transactions Act (FACTA), adopted by Congress in 2003.
Over the last year, the free credit report has been made available gradually to consumers in different regions of the country. Beginning September 1, consumers in states along the east coast will become eligible and the program will be up and running nationwide.
Free credit reports are becoming available to consumers during a year in which news about data security breaches involving sensitive information like Social Security numbers has made big headlines.
Over 50 million consumers have been put at heightened risk of identity theft because sensitive information maintained about them by companies, universities, or government agencies has been lost or stolen as a result of lax security practices.
"All the data security scandals this year have underscored how important it is for consumers to monitor their credit reports regularly to detect possible identity theft," said Susanna Montezemolo, policy analyst with Consumers Union's Financial Privacy Now campaign. "This new law makes it easier for consumers to keep an eye out for fraud and to make sure their reports offer a fair picture of their credit history.
On September 1, so will consumers in Connecticut, Delaware, Maryland, Massachusetts, Maine, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, the District of Columbia, Puerto Rico and all U.S. territories.
The new law enables consumers to request their free credit reports through a central web site, toll-free telephone line, or by mail and gives them the option of making a single request to get copies of their report from all three major credit bureaus. Consumers can order their credit reports by clicking on www.annualcreditreport.com, calling 877-322-8228, or filling out the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
"Consumers should be sure to order their free credit reports through the centralized channels created by the new law or they may end up getting duped into paying for extra services," said Montezemolo. "If consumers run into trouble getting their reports at no charge or have other problems, they should call the FTC's toll-free number -- 1-877-FTC-HELP -- for assistance."
Having good credit can mean the difference between paying a high or a low interest rate for a loan or whether consumers are offered insurance, jobs, or housing. To help consumers take advantage of this new law, Consumers Union, the non-profit publisher of Consumer Reports has published "Your Credit Matters," an online guide with detailed advice on how to order a free credit report, review it for accuracy, and correct mistakes if you find them. The guide is available at: www.consumersunion.org/issues/creditmatters.html.
In "Your Credit Matters," Consumers Union offers tips to consumers on how to review their credit reports since they often contain inaccuracies. For example, consumers should look to make sure that their name, address, Social Security number and all other personal information are correct.
They should make sure that there are no accounts, debts, bankruptcies or court judgments on their report that don't belong to them. And they should make sure that payment histories and balances are correct and that any errors they have reported have been fixed.
In addition to highlighting other credit report information to review, the guide offers helpful tips and information about correcting errors, including new rights available to consumers who find mistakes and contact information for each credit bureau to report disputes.
The guide also offers advice about what consumers should do if they discover they've become a victim of identity theft. And it provides useful information on obtaining and understanding credit scores, and how consumers can monitor their own credit.