DO YOU KNOW how good (or bad) your credit is? Many Americans who think they know might be surprised at what's in the files of major credit reporting services: In a recent survey of the accuracy of credit reports, 9 million people checked their files -- and 3 million found something they thought was wrong.
That is why Congress should pass legislation this year requiring those companies to send consumers a copy of their credit records each year, free. Now, they must do that when it is too late -- after a customer has been turned down.
The opportunities for error in credit reports are many: Credit reporting companies process 2 billion changes each month. Information may get garbled, records of people with similar names confused, or changes in credit data delayed. It can take weeks, even months, to get them cleared up.
Now, the only way to scout your credit files is to buy access to them. The three major credit agencies charge up to $39 annually to keep you up to date on your own credit. Since you can't be sure which agencies lenders may refer to, it could cost you more than $100 a year just to catch errors in your own credit records -- before any damage is done.
Instead, the companies should be required to send a report each year to everybody in their files, and to correct errors within 30 days. A bill in Congress, sponsored by Rep. Charles Schumer, D-N.Y., would do that.
In some states, attorneys general are charging credit reporting companies with intentionally fouling up credit records. That is election-year talk. It is bad enough that errors get into your file by mistake; making sure they are promptly spotted and corrected should be the reporting companies' obligation.