Check your credit rating annually

March 24, 1995|By Andrew Leckey

Get credit where credit is due.

Spurred by horror stories of credit denial to hard-working Americans based on inaccurate information, the nation's credit bureaus have been under the gun.

Depending on whom you talk with, the nagging problem of mistakes in individual credit files is either understated or exaggerated. Whichever is the case, every American must understand how credit works, how to find out whether a record is accurate and how to make corrections if necessary.

"Biggest problem we hear about is 'mixed file' error, in which there's something in a credit report that doesn't belong there, likely because the credit bureau didn't match it to the proper file," said David Medine, associate director of credit practices for the Federal Trade Commission. Mr. Medine urges consumers to play it safe by always applying for credit using the same exact name to avoid confusion.

Another complaint -- though Mr. Medine believes it's on the decline -- involves delays in bureau response to requests to verify report information. TRW, Equifax and Trans Union, the three major automated credit reporting systems, are all under an order to resolve disputes within 30 days.

Some disagree with claims of progress.

"I still get the same number of complaints in the mail I always did and they're still as outrageous, such as a worker in our office who received another individual's credit report from a bureau by mistake," said Edmund Mierzwinski, consumer program director for the U.S. Public Research Group advocacy group in Washington, D.C.

Many credit decisions are made with computerized models, using data to create mathematical interpretations called credit scores, Mr. Mierzwinski said. Since credit decisions are often by machine rather than human interpretation, it's important to have an accurate report.

Your credit record contains personal information such as name, address, Social Security number, date of birth and employment. It includes your history of paying habits with stores, banks, finance companies and mortgage firms. There are public record items such as tax liens, judgments and bankruptcy, as well as a notation of each time a credit granter or other authorized party requests a copy of your file.

By law, negative information can be kept no longer than seven years, except for bankruptcy, which is 10 years.

As far as reports themselves, TRW's information is in narrative form, meaning conventional paragraphs, while Equifax and Trans Union simply list creditors and your payment record. Check your record annually. If you find bad information, dispute it by writing a letter and include support documentation. A brochure on how to dispute faulty information and a sample letter are available from the FTC, Correspondence Branch, Washington, D.C. 20580.

Credit bureaus can't sell lists of creditworthy individuals to be targeted by independent marketers. (Trans Union is contesting an FTC order that said it violated the Fair Credit Reporting Act in that regard.)

TRW will give you one free copy of your credit report annually, whether or not credit was denied. Write to TRW Consumer Assistance, P.O. Box 2350, Chatsworth, Calif. 91313.

Equifax charges up to $8 for a copy (except in Maryland and

Vermont, where by law it's free, and in Maine, where it's capped at $3), or gives it free if you were denied credit. Contact Equifax at P.O. Box 740241, Atlanta, Ga. 30374-0241.

Trans Union also charges up to $8 for a copy (except Maryland, Vermont and Maine) or gives it free if denied credit. Contact Trans Union at 760 W. Sproul Road, Springfield, Pa. 19064.

If you already have a report but have a question about it, contact Equifax at P.O. Box 740256, Atlanta, Ga. 30374-0256; TRW at P.O. Box 2106, Allen, Texas 75002; or Trans Union, P.O. Box 403, Springfield, Pa. 19064.

Avoid expensive credit clinics and credit repairers, who claim they can get negative information removed. Do it yourself instead, or contact a non-profit credit service such as the nationwide Consumer Credit Counseling Service at 1-800-388-2227.

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