Utahns can soon get credit reports for free

0 Comments | Deseret News (Salt Lake City), Nov 24, 2004 | by Jenifer K. Nii Deseret Morning News

Beginning Dec. 1, Utahns will be among the first Americans to take advantage of a new law giving them the right to a free copy of their credit reports.

As part of the 2003 Fair and Accurate Credit Transactions Act (FACTA), consumers nationwide will be entitled to one free copy of their credit report annually from each of the nationwide credit bureaus. Consumers in the western United States will have the first shot as the law is rolled out over the next year.

"I'm excited to no end that this law was passed and that it now gives consumers an opportunity to take a free peek into their financial history," said Francine Giani, director of the Utah Division of Consumer Protection.

In addition to allowing consumers to clean up their report -- by clearing off unused or closed credit accounts or correcting errors -- it also helps them guard against identity theft, Giani said.

"It's a big problem, bigger than most people realize," Giani said. By failing to check credit reports, she said, "we sometimes get caught in the trap of being a victim and maybe not even knowing it."

The first identity theft case investigated by the consumer protection division involved a Layton woman who, when she went to make a major purchase, found that her credit had been used without her knowledge or consent, Giani said.

"She found that her credit report was more the suspect's than it was hers," Giani said. "She was devastated by the experience."

In conjunction with the FACTA rollout, the three major credit bureaus -- Equifax, Experian and TransUnion -- announced in a joint statement this week that they will launch a centralized credit report request service, www.AnnualCreditReport.com. The site will allow consumers to process requests for a free credit-file disclosure; view and print one, two or all three of their free credit reports; or receive information about requesting their credit reports by telephone or by mail.

In addition to identity theft and accurate reporting concerns, reviewing credit reports for accuracy has other benefits, according to John Danaher, president of True Credit, TransUnion's direct-to- consumer business.

"Not to be overly dramatic, but it (failing to check credit reports) probably ends up costing consumers billions of dollars annually," Danaher said. "The credit report, and the credit score that's based on the data in that report, is used by credit granters to determine the interest rates that people are given on home mortgages, home equity loans, auto loans and credit cards.

"By not knowing what's on your report and not managing your credit score, you are without a doubt paying more than you should. On the other hand, if this is information that you're engaged in, you are over time going to wind up paying less for things like home mortgages and credit cards."

A True Credit survey conducted earlier this year showed that 90 percent of respondents did not know that a credit score is a three- digit number and could not give an indication of what a good credit score is, Danaher said.

"So we think that consumers' overall engagement with credit reports and credit scores is pretty low," he said.

Robert Brough, spokesman for Zions Bank, said both lenders and consumers benefit when the information in credit reports is accurate.

"If consumers are more engaged in the process and are more familiar with their credit report and the information included therein, and if they are involved and take care of what errors may be there, I think it's a benefit to everybody," Brough said. "I think we (Zions Bank) can be more confident that the information is good and reliable. And consumers can be confident that the information the bank is using to determine whether to grant a loan is accurate, which helps us make the most appropriate decisions.

"When you're applying for a loan or any kind of credit, records of your previous dealings with creditors or financial institutions are critical. Whether we're able to extend credit to an individual may depend on the information we receive from the credit reporting industries. So you want it to be accurate."

E-mail: jnii@desnews.com