Federal law provides access to free credit reports


August 14, 2005|By Eileen Ambrose

COME SEPTEMBER, residents in Maryland and other Eastern states will be entitled under federal law to a free credit report once a year from each of the three major credit bureaus.

Or, in other words, they don't have to pay a penny to see what lenders are looking at before granting a mortgage, car loan or credit-card application.

The federally mandated reports are being gradually rolled out across the country, beginning on the West Coast last December. Fourteen Eastern states and Washington are the last to gain access.

Of course, Marylanders for years have been eligible for free reports annually under state law. That doesn't change. So next month, they will be able to get two free reports a year from each of the three bureaus, or six a year.

"This is a really important right for consumers to exercise," said Pam Dixon, executive director of the World Privacy Forum, a San Diego nonprofit that researches privacy issues.

It's not just lenders who look at credit reports, but prospective landlords and employers. Reports also can alert you to unusual activity that might indicate someone is attempting to open accounts in your name.

Consumers can get all three reports at once or order one every few months. By staggering reports, you can monitor your credit record throughout the year without having to pay a service to do the same, consumer advocates said.

(The rules to get reports under state and federal law differ. Marylanders wanting a free report under state law must call Equifax at 800-685-1111; TransUnion at 800-888-4213 and Experian at 888-397-3742.)

People can order a report under federal law by phone, mail or online. The quickest way is online, where reports can be viewed on the spot once the bureaus verify a consumer's identity.

There's one official Web site for the federally mandated reports: www.annualcreditreport.com.

Take care, because there are plenty of sites with similar sounding names. If you use a search engine, such as Google or Yahoo, and type in "free credit report" or "annual credit report," the official site pops up along with others pitching reports, credit scores and monitoring services for a price.

Likewise, make a typo while inputting the official site's address and you can land on a site that hawks products - or worse.

In June, there were 112 "imposter" sites up and running that used the words "annual credit report" in some fashion or slightly misspelled, according to survey released last month by the World Privacy Forum. That's up from 50 imposters in February, the group said.

Many steer consumers to companies selling products. Some link to paid services offered by affiliates of Experian and TransUnion, Dixon said. Others collect personal information and sell it to other companies, she said.

In a few egregious cases, World Privacy alerted officials to sites that subsequently were shut down, including one that attempted to steal Social Security numbers, Dixon said.

Those in the credit reporting industry say they are concerned, too. Before www.annualcreditreport.com was launched, the credit bureaus and their trade association, Consumer Data Industry Association, purchased more than 200 domain names that sounded similar to the real thing and shut the sites down. In June, the association wrote the Federal Trade Commission, urging it to take action against bogus sites, said Norm Magnuson, an association spokesman.

"It is an issue of concern for the FTC. We are looking into it and plan on taking enforcement action whenever appropriate," said Sandra Farrington, staff attorney with the FTC's division of financial practices.

In the meantime, to avoid misspelling the Web address or clicking on the wrong site, Farrington suggested consumers go to the FTC's site at www.ftc.gov/credit, which has a link to the official site.

Dixon, however, suggests requesting a report by telephone or mail. Consumers can order a report at 877-322-8228.

To get a report by mail, fill out a request form available at the FTC Web site and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA, 30348-5281.

If you do opt to get a report online, be prepared to answer a series of personal questions. That's how each bureau verifies that it's you, not an imposter. Some say the questions, though, might be a little too tough.

In an experiment this spring, only half of 77 adults were able to access all three of their credit reports online, according to Robert Mayer, a professor of family and consumer studies at the University of Utah who conducted the test.

"The most galling to consumers was when they felt they had put in the correct information and it was turned down" with no explanation, he said. Others complained that the questions were too obscure and took a lot of digging into home files, he said.

Experian spokesman Don Girard said security is a top concern, and the credit bureau doesn't want to make it easy for someone who, say, steals your wallet to also get access to your report.

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