Legal Update:
Good News on Credit Reports
A new law, the Fair and Accurate Credit Transaction
Act (FACTA), helps you make sure that your credit
report is error-free. Under the law, you have the
right to one free credit report a year from each
nationwide consumer reporting agency.
The free annual credit report provision of FACTA
is being implemented in a staged process over a
nine-month period from December 1, 2004 to September
1, 2005, beginning in the west coast states and rolling across the country.
The last region to get access to free annual reports will be the Northeast.
You can get your free credit report from the credit bureaus’ centralized
site: www.annualcreditreport.com (which also has the map showing when reports
will be available in different regions of the county) or by calling 877-322-8228.
The three nationwide consumer credit reporting agencies (Equifax, Experian
and TransUnion) get their information from different sources, so credit reports
from each agency may look a little different. Some financial advisors recommend
staggering your requests over a year so that you see a report every four
months or so.
The new law also gives you the right to know
your credit score. Your credit score attempts
to determine how likely it is that you will
pay your debts.
Your credit score may determine whether you are able to get a mortgage
or the credit to buy a car or truck. Your score
takes into account your payment
history,
the amount of your outstanding debt, and many other factors. FACTA requires
consumer credit reporting agencies to give you, upon request and payment
of a “fair and reasonable fee,” your current credit score and related
information. National consumer credit reporting agencies appear to be charging
consumers between $4 and $8 for a current credit score (depending on the consumer’s
state of residence). Another key change made by FACTA is that now
you may dispute inaccurate information directly
with the furnishers of information, as well as
with the consumer-reporting
agency, as was previously required. Under the new law, furnishers must
investigate all disputes and can’t report
negative information while an investigation is
pending.
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