Protecting Your Financial Health

The Federal Fair and Accurate Credit Transactions Act of 2003 (FACTA), which amended the Fair Credit Reporting Act, has recently gone into effect.  This new rule guarantees consumers one free check of a credit report every 12 months from each of the three major credit reporting agencies: Equifax, Experion and TransUnion.

One of the more overlooked tasks in maintaining financial health is reviewing your credit report, a task that should be done at least annually.

The credit report is probably one of your most important documents when trying to purchase a home, car, or for that matter, even an educational loan, life insurance, or seeking employment.  A poor credit report will greatly increase your chances of higher rates than those individuals with good credit histories.  The better the report, the lower the interest rates on any loans taken.  Employers are increasingly requesting candidates’ credit reports in the financial, securities and insurance fields.

People are often shocked to be barred from financing a new car or their child’s education because of late payments made as long as 12 years prior to their current loan application.  Credit reports should only reflect histories in the most recent seven years of consumer activity, absent any bankruptcy.  Unfortunately, no matter how hard you try to maintain your good credit, misinformation about your history can happen.  If so, this should be fixed immediately.  By regularly obtaining and reviewing your credit report, it is possible to avoid unwanted surprises, such as the reporting of debts older than seven years and open accounts you may never have opened due to identity theft.

You have the right to report inaccuracies with regard to your credit report, and you can even argue for their removal.  This is done by documentation supplied to the credit reporting agencies.  They then have 30 days to review and correct any of the misinformation.  You are even entitled to place a 100 word personal statement in your report explaining the past financial problems.

Since December 1, 2004, residents of the following states may be able to obtain free credit reports: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Utah, Washington and Wyoming.

As of March 1, 2005, residents of the following states will also be able to do so: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.

By September 1, 2005, residents of the remaining states will also be able obtain free credit reports as well.

In an effort to avoid fraud and any charges by fraudulent reporting companies that are actually scam artists, you should only obtain your annual report through one of the following entities:

Equifax
www.equifax.com
(800) 685-1111
P.O. Box 740241
Atlanta, GA 30374-0241

Experion
www.experion.com
(800) 397-3742
P.O. Box 2104
Allen, TX 75013

TransUnion
www.transUnion.com
(800) 916-8800
P.O. Box 1000
Chester, PA 19022

Federal Trade Commission
www.ftc.gov or www.annualcreditreport.com
(877) 322-8228
P.O. Box 105281
Atlanta, GA 30348-5281

Since you are allowed to obtain one free credit report from each of these agencies every year, consider staggering your requests throughout the year so you may receive one approximately every four months.