Just a few years ago, most of us had no clue that an agency was maintaining an individual file for each of us with a detailed report of our credit history in a Credit Report. And, if you asked about someone’s credit score, they would have likely scratched their head and asked what the heck you were talking about.
Today most of us are aware that companies like Equifax, Experian and TransUnion (the “big three”) keep a file on every person in the United States. And, many of us are aware that even our most minute financial transactions are reported there, whether we like it or not.
I’m sure many of you are also alert to the fact that these credit agencies produce a credit score for each of us that banks, credit card companies, mortgage lenders – and no telling who else – use to make determine whether we get credit and what our interest rate will be on the loans.
To add insult to injury, insurance companies are now getting in on the game too, using our credit scores to determine whether or not to issue us insurance. Some insurance companies are even reportedly dropping insurance coverage for individuals whose credit score drops by some yet-unknown quantity.
Finally, if you are applying for a job in the near future, you can expect your future employer to check your credit score before a job offer is made.
There is a lot riding on this “credit score” number and most of us are still unsure what the whole thing is about.
Consumer advocate Clark Howard notes that the whole credit score issue came to the public’s attention when eloan.com started publicizing that we could get our 3 digit credit score for free. Clark says banks were furious when eloan made this practice common knowledge, and that the disclosure opened up the whole credit score concept to public scrutiny.
Once consumers realized there was a “secret” process used by banks to determine who was eligible for credit and at what terms credit would be granted, the public demanded to know more. Consumers asked for access to their credit files and sought to remove the cloak of secrecy surrounding the score determination process.
Georgia Residents Entitled To Free Credit Report
Federal and State legislation was enacted that gave consumers some rights in regard to their credit files. In particular, residents of the State of Georgia are entitled to one free credit report per year from each of the three major credit reporting agencies.
Once individuals started looking at their credit reports, they realized that banks and credit card companies were making a lot of errors when reporting financial transactions to the credit agencies.
In addition, many found rampant evidence of identity theft. Criminals were stealing identities and posing as the victims in order to open fraudulent credit cards and loans. These criminals would pocket whatever cash or stolen goods they could acquire using the fraudulent accounts and then disappear.
In most cases the victim was totally unaware of this theft – until they went to apply for a legitimate credit card or purchase a home. Legitimate lenders would then review the credit record and come back with the sad news that supposedly good credit was actually a train wreck in process.
How can you get your free credit report and make sure your own credit isn’t wrecked? There are several ways to obtain the free credit reports entitled to all Georgians. Those with internet access can simply go to www.annualcreditreport.com and follow the instructions to request a report.
If you don’t have internet access, you can call 1-877-322-8228. Additionally, free credit reports can be requested by mailing a request form (have a friend with internet access print a copy of the request form for you) to Annual Credit Report Request Service P.O. Box 105281 Atlanta, GA 30348-5281.
So what is this Annual Credit Report service all about? We went to the web site for the answer:
“AnnualCreditReport.com is a centralized service for consumers to request annual credit reports. It was created by the three nationwide consumer credit reporting companies, Equifax, Experian and TransUnion.
AnnualCreditReport.com processes requests for free credit file disclosures (commonly called credit reports). Under the Fair and Accurate Credit Transactions Act (FACT Act), consumers can request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies. AnnualCreditReport.com provides consumers with the secure means to do so.”
How The Process Works
I was initially confused by the fact that all three credit agencies worked together to provide a single entity through which I could request my free credit report. Previously, I had to go to the individual credit agencies’ websites and made a request to each separate agency for my credit report
Fortunately, Georgia consumers can ignore the ads for purchasing credit reports. To get the free copy of your credit report you are entitled to by law, you must go through the annualcreditreport.com website the credit reporting agencies have set up. Of course, it takes more than a couple clicks to access this highly sensitive information.
Before you are allowed to receive a copy of your credit report, you are asked several detailed questions about your credit history. In addition to requiring your social security number and other predictable questions, they also ask you to answer a question about a random financial transaction.
I was asked to identify, in a multiple choice format, the amount of my last car payment. If you screw up, you have to make the request over the phone and it involves an even more detailed quiz. We know about this part too, as we failed the quiz when requesting one of Sally’s reports.
The upside is that potential identity thieves may not know enough detailed information to access your credit report. The obvious downside is that many of us have trouble remembering all the details about our financial transactions.
What To Do With Your Credit Report
Once you have your credit report in hand, you should carefully review the document for errors. My brother-in-law once found a reported delinquency in a loan payment for the purchase of a dump truck on his credit report. As you could guess, he never purchased a dump truck, and had never even contemplated the purchase of a dump truck.
I have found numerous minor errors on my report over the years. If you find errors on your report, remember that they won’t remove themselves. Errors must be disputed to be removed from the credit report. You can dispute the items in error online, or by sending a letter to the specific address identified on the credit report.
You must follow the dispute instructions provided by the credit reporting agencies exactly. Agencies have 30 days from the time of dispute to prove their claim or remove it from your credit file. There have been varying reports about the credit agencies’ ability to live up to the “prove or remove” requirement.
Stay on top of your disputes by monitoring your report. And remember to dispute the item in error with each of the three credit reporting agencies separately. Doing so at one agency does not automatically remove the identical item at the other two agencies.
Credit reports are important, not only because they record your credit history, but also because they are used to compile your credit score. There is a lot of complexity to the calculation of credit scores, with various credit scores calculated by the different entities involved.
Sally English and The English Team. Sally English and The English Team are real estate agents specializing in homes convenient to Emory University and the Centers for Disease Control. Call us at 404-229-2995.