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Dear Gary,
My husband will not get a credit report because he believes it costs too much. I told him that it is free once per year. He said it is only free if someone is denied credit. Which of us is correct? How much does it cost? Can you please print the contact information for these credit companies we must contact as well.


Thank you so much!

Tina asks a good question. And, it's a question that every adult should know the answer to. Because your credit report can make a big difference in your life.

It contains a wealth of information about you. Not only your birth date and social security number, but also your current and past addresses, telephone numbers (including unlisted ones) and employment. Plus, mortgage and child support payments. Not to mention your payment history on credit cards and other loans.

The information is collected from a variety of sources. Primarily from people who have loaned you money. They regularly report your current payment status. The reports are sent in to credit reporting agencies (CRAs). Three major CRAs compile the data and provide reports on you.

Anyone with a 'legitimate business need' can get your report. In most cases businesses accessing your file get your prior approval. Of course, sometimes the request doesn't mention the words 'credit report' and you may not realize that you've given approval. For instance, a job application may have a statement authorizing the potential employer to check your file in fine print somewhere on the application.

Now let's get to Tina's question. The answer is that they're both right! At least for now. Until December, 2003 only Tina's husband was right. Unless you were denied credit or a job because of your credit report you had to pay to get a copy. In most states the CRA could charge up to $9 for your report. A few states required free reports.

The Fair and Accurate Credit Transactions Act (don't you just love the way they name these bills?) also known as FACTA addressed a number of issues relating to credit reports. Among those was the right for every person to get a free copy of their credit report from each CRA once per year. The Federal Trade Commission was instructed to create a framework for doing that.

The FTC proposed a scheduled roll-out that would begin in 13 western states on 12/1/04 and would end with the eastern states on Sept. 1, 2005. So depending on where you live you'll be able to get a free report by fall of 2005.

But, Tina's hubby might be wise to break down and pay for a report now. If they're about to make a major purchase that requires borrowing money (i.e. house or car) they should review their report before looking for financing. Your credit report will have a major affect on whether you get credit and how much you pay for it.

One of the big reasons to check your report is that they can contain inaccurate information. Given the huge number of records that CRAs add to credit reports, it is not surprising that there are errors. Unfortunately, there are many more mistakes than you might expect.

There are two sources for inaccurate information. Data that belongs to someone else could be mistakenly put in your file. Or someone might be using your identity and borrowing money in your name without your knowledge. That's known as 'identity theft'.

The U.S. Public Interest Research Group (USPIRG), conducted surveys that showed that one in four credit reports contained serious errors. Serious enough to deny you credit or a job. Mistakes of some kind were found in 79%.

Experts suggest that you check your credit report at least once a year. To be thorough check all three reports. Under FACTA you'll be able to make one contact and get all three reports. Until then you'll need to contact each CRA individually.

You have the right to have errors corrected. Both the CRA and the company reporting incorrect information are responsible for corrections. Notify both in writing. Explain the error and ask for a correction. If you have documents that support your position send copies with your request. Generally the investigation of your request will be made within 30 days. If you still have trouble contact your state's consumer affairs office.

OK, so how does Tina contact the CRAs? Here's their phone numbers and addresses.

Equifax 800-685-1111
PO Box 740241
Atlanta GA 30374

Experian 888-397-3742
PO Box 2104
Allen TX 75013

TransUnion 800-888-4213
PO Box 1000
Chester PA 19022

Hopefully Tina will find a clean, correct credit report.

The Dollar Stretcher - Gary Foreman is a former financial planner who currently edits website and newsletters. You'll find thousands of articles to help stretch your day and your dollar.

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