Bowing to critics who say computerized credit records are littered with inaccuracies, TRW Inc., a leading compiler of personal financial data, said yesterday that it would allow consumers to obtain free copies of their credit histories.
The move appeared to be a significant turnabout for TRW, one of three large companies that compile financial information on more than 170 million Americans, or most adults. Until now all the companies have refused to go along with such a policy, a big demand of consumer groups, and have charged as much as $20 to supply a record.
But more important than the savings for consumers, industry experts said, is that the new policy indicates an increasingly conciliatory attitude on the part of TRW as it faces rising criticism in Congress, from state attorneys general and from consumer and privacy advocates.
TRW also announced yesterday that as many as 1,500 consumers in Vermont and New Hampshire had apparently erroneous information included in their files after tax bills were classified as liens, the Associated Press reported. The company said the move to offer free credit reports was unrelated to that problem.
TRW admitted that the errors may have made it difficult for those people to get credit.
Tax information from Maine, Rhode Island, Vermont and New Hampshire has been stricken from TRW's records, TRW Consumer Affairs Director Marty Abrams said.
There have been no reports of problems with data from Maine and Rhode Island. But because the same company, National Data Retrieval Inc., supplied data for all four states, all the information was removed, Mr. Abrams said.
The other giants of the billion-dollar industry -- Trans Union Corp. of Chicago and Equifax Inc. of Atlanta -- said yesterday that they would not provide free credit reports.
"Providing so-called free reports is not without eventual higher costs to the consumer," Trans Union said. "It is an extremely expensive solution."
Critics have charged that the three companies maintain credit histories riddled with mistakes, sell private data to companies that send out "junk mail" and make it easy for practically anyone to pull up confidential reports.
Until this year, the industry had generally denied that severe problems existed.
In its announcement yesterday, TRW said its main goal now was to provide a salve for consumers' fears.
"This move is an important step in the evolution of the credit-reporting business," said D. Van Skilling, an executive and general manager for TRW Information Systems and Services. "In the past we believed that if we met the letter and spirit of the laws governing the credit-reporting industry, as well as our customers' needs, we were fulfilling our obligations. But we need to do more and we will do more."
TRW said it would provide the credit reports to consumers free once a year upon request. To pay for that service, along with other consumer programs this year, TRW expects to spend $26 million, Mr. Van Skilling said.
The announcement came two days before public hearings in the Senate on problems consumers face with the credit-information industry.
Representative Esteban E. Torres, D-Calif., who has held hearings on these issues, said he plans to introduce a bill this week that would require the industry to provide free credit reports.