SAN FRANCISCO -- Ordering your free annual credit report is a smart way to start off the new year and ensure that an important part of your financial house is in order, according to Consumers Union, nonprofit publisher of Consumer Reports.
Federal law gives all Americans the right to order a free copy of their credit report every 12 months from the three major nationwide credit reporting agencies: Equifax, Experian, and TransUnion.
But a survey released by the Federal Trade Commission last November found that only 22 percent of Americans have done so since free credit reports became available in some parts of the country in December 2004.
Annual free credit reports became available nationwide in September 2005.
"Having good credit can mean the difference between paying a high or a low interest rate for a loan or whether you'll get offered jobs, or even an apartment," said Gail Hillebrand, Senior Attorney with Consumers Union. "It's critical to review your credit reports every year to make sure they offer a fair picture of your credit history and to keep an eye out for identity theft."
To help consumers take advantage of their rights to a free annual credit report, Consumers Union has published "Your Credit Matters," an online guide with advice on how to order a free credit report, review it for accuracy, and correct any mistakes. The guide is available at http://www.consumersunion.org/finance/YourCreditMatters.html.
Consumers can order their credit reports online at www.annualcreditreport.com, by calling 877-322-8228, or by filling out the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
These are the only official channels to make a request for a free annual credit report.
Consumers can order copies of their free credit reports from all three consumer reporting agencies all at once, or stagger their requests over the course of the year in order to check their credit three times a year.
Since the law giving consumers access to free credit reports went into effect, numerous private web sites have sprung up that claim to offer free credit reports but direct consumers to purchase other services like credit monitoring for a fee.
A 2007 Consumer Reports WebWatch analysis of 24 such web sites found that nine were owned or closely connected to TransUnion and eight were owned or otherwise closely connected to Experian.
"Steer clear of web sites that provide free credit reports only if you sign up for expensive credit monitoring services," said Hillebrand. "If you run into trouble getting your free credit reports or have other problems, call the FTC's toll-free number -- 1-877-FTC-HELP -- for assistance."
Credit reports can sometimes contain errors, which can cause consumers to be denied credit, a loan, an apartment, or even a job. In "Your Credit Matters," Consumers Union offers tips to consumers on reviewing credit reports for inaccuracies. For example:
-- Make sure that your name, address, Social Security number and all other personal information is correct.
-- Make sure that there are no accounts, debts, bankruptcies or court judgments on your report that don't belong to you.
-- Make sure that payment histories and balances are correct and that any errors you have reported have been fixed.
-- Check each of your consumer credit reports for errors. Keep in mind that the contents of your report may not be the same at each consumer reporting agency.
In addition, the guide offers helpful tips and information about correcting errors:
-- File your dispute in writing with the consumer reporting agency that issued the credit report containing the error and keep a copy of your letter and all documentation for your records. Do not send your original documents.
-- Give the consumer reporting agency details such as the name of the "furnisher" who provided the incorrect information, the reasons for your dispute, and copies of any documents or information to substantiate your claim.
-- Follow up to ensure the corrections have been made.