Credit reports help more Americans monitor debt

It’s become much easier for Americans to monitor their credit reports and scores, and that’s giving consumers more control over borrowing costs and an added defense against credit card fraud and identity theft.

Since Sept. 1, consumers nationwide can obtain a free copy of their credit report every year from each of the three main credit reporting agencies — Equifax, Experian and TransUnion.

The program, mandated by the Fair and Accurate Credit Transactions Act of 2003, allows consumers to go to a single Web site, www.annualcreditreport.com, where they can request their reports. Or they can call a toll-free number, 877 322-8228, or write to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Ga. 30348-5281.

Robin Holland, senior vice president for operations at Equifax, said millions of Americans are using the program.

“Our inquiries are up significantly, and not necessarily because consumers found something inaccurate in their reports,” she said. “In some cases, it’s the first time the consumer saw a credit report, and they call and ask ‘What does this mean?’ or ‘Why is this included?’

“It’s been a great learning opportunity.”

The aim of the legislation was to give consumers easier access to credit reports, which track how much debt they have and how promptly they pay their bills. A clean report means a consumer likely can get a new mortgage or car loan at a good interest rate; a bad one can result in credit being denied or offered only at a high rate.

And because employers and rental agents also check credit reports, a bad report can prevent people from getting a job or the apartment they want.

Unfortunately, many Americans don’t pay much attention until it’s too late.

“Some people will leave negative stuff on their credit reports for ages instead of getting it corrected,” said Paul Richard, executive director of the Institute of Consumer Financial Education in San Diego. “Then they run into a problem, like they’re denied a car loan, and they’re forced to be reactive rather than proactive.”

Although consumers can order their three free reports at the same time, Richard suggests they get one report from a different agency every four months so they can monitor changes throughout the year.

Carolyn Tarrant, a regional director for Money Management International, a nonprofit credit counseling agency based in Houston, said consumers need to look at their reports carefully.

“Make sure all your personal information is correct — your name, address, prior addresses, Social Security number, the month and date of your birth, and any employment information,” she said. “If there’s just one digit wrong in your Social Security number, for example, someone else’s credit information could appear.”

Then, she said, make sure all the information about your debts is correct. Each account will have a separate section and information about your credit limit, balance outstanding and whether you’ve been paying on time.