As Marylanders are already able to do, others across the United States can soon get a free copy of their credit reports -- a year after the government promised to make them available at no charge.
The free access is the result of longtime lobbying to reform the credit-reporting system to help consumers better protect themselves against identity theft and give them better methods of ensuring an accurate credit history.
Until now, you could get a free report -- a log of your credit history -- only under specific circumstances, such as being denied credit in the past 60 days. Otherwise, you had to pay, and the cost varied by state, although residents of seven states could get one free each year.
Starting Wednesday, you'll be able to visit a centralized ordering site via Internet, phone or mail to get one free credit report a year from each of the three major credit reporting bureaus: Experian Inc., Equifax and Trans Union LLC via the Web at www.annualcreditreport.com; by phone, 877-322-8228; or by mail, Annual Credit Report Request Service, PO Box 105281, Atlanta, Ga. 30348-5281.
Here's what to know when requesting your free credit report:
You may have to wait a few months to order unless you're in one of the states that already let you obtain a free credit report -- Maryland, Colorado, Georgia, Massachusetts, Maine, New Jersey and Vermont.
The program starts on the West Coast, then rolls east. Washington, Oregon, California, Nevada, Idaho, Montana, Wyoming, Utah, Colorado, Arizona and New Mexico residents can start ordering free credit reports in December. Consumers in Illinois, the Dakotas, Nebraska, Kansas, Missouri, Iowa, Minnesota, Wisconsin, Michigan, Ohio and Indiana must wait until March. Texas, Oklahoma, Arkansas, Louisiana, Georgia, Alabama, Kentucky, Tennessee, Mississippi, Florida and South Carolina come on board in June, and the remaining states, as well as the District of Columbia, in September.
Only the official channel will get you your free credit report. Some Web sites or direct mail ads may offer you a free credit report if you agree to test their service on a trial basis. However, you'll get hit with a huge bill if you forget to cancel the service once the test period expires.
"The only way to ensure that you get a free credit report is to go to the exact Web site or call the exact number," said Brad Scriber, who works for the Consumer Federation of America. The centralized ordering site will not contain any advertising for other credit bureau products, said Susan Henson, a spokeswoman for Experian. But you could be solicited for other products if you go to a credit bureau's proprietary Web site.
Each credit bureau has slightly different information, so it pays to get a copy of all three. Since you won't get a combined report from all three bureaus, you'll have to request the agency's report you want when you contact the centralized system.
You won't get your credit score. Credit reports and credit scores are different. The credit report tracks your credit history. A credit score ranks your creditworthiness. The Fair and Accurate Credit Transactions Act, which made the free report possible, pertains only to credit reports. You'll have to pay extra, as much as $5, for your credit score, and each agency sells its own.
Your credit score also can be a moving target.
"Your credit score can vary from day to day because your credit file is constantly changing because new information is always being updated," Henson said. Although there are dozens of ways to figure credit scores, the FICO score developed by Fair Isaac and Co. is most commonly used by lenders. It's a number from 300 to 850 that shows your likelihood of taking 90 days or more to repay a credit account.
You can buy your FICO score through Fair Isaac, but it's tied to a credit report and will cost you $12.95. You can't buy it separately.
Your credit score shouldn't drop if you directly ask for your credit report through the central source or a credit bureau. If a lender asks to see it on your behalf -- perhaps you've applied for a credit card or auto loan -- then your score could take a hit of a few points. That's why financial experts warn consumers about applying for credit cards and shopping interest rates too aggressively when getting ready to buy a home.
Financial experts suggest requesting a free credit report from a different credit bureau every four months. That way you can mind your credit history for potential fraud and identity theft throughout the year instead of paying a monthly fee for a monitoring service.
Lorene Yue is a Your Money staff writer.