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Credit Reports: At no cost yet at a high cost
Come September and the law that sanctions Americans getting one free annual copy of their credit report turns one year old. Yet many Americans are not excited.
You may now be able to get these reports that previously cost $25 to $35 for free. But that doesn't mean your troubles are over. There is still the hassle of obtaining them and rectifying the numerous mistakes they contain which doesn't make your life any easier.
In fact the procedure of getting a free credit report has become like visiting the dentist or undergoing a painful test. In both the cases you benefit in the long run, but temporarily it is a problematic chore.
For starters you need to know how to lay hands on this report. Only one website offers it - www.annualcreditreport.com. You can either download directly from the website or order a free copy via phone or email. But be careful what you type cautions Ed Mierzwinski, consumer program director of the U.S. Public Interest Research Group (Uspirg) in Washington. There are many fraudulent sites out there that are spelt almost identically to the original and their aim is to rip of the customer.
As though things were not bad enough Experian, TransUnion and Equifax - the three major credit bureaus have created their own competing business called freecreditreport.com. By dealing with this site you can get your credit report's free copy if you enter your name for the "free-to-pay credit monitoring services".
What does this above service mean? It means that you can enjoy some financial service free of charge for a specified time period which will not be
charged to your credit card unless you didn't remember to cancel it.
Last year Experian was sued by the Federal Trade Commission. The reason was consumers were being duped by Experian through the freecreditreport.com site to pay out $79.95 on free-to-pay credit monitoring. Experian paid a settlement of $950,000 to the FTC. Nor do troubles cease upon receiving the credit report.
For example Caroline Hwang a resident of New York guessed that thieves had stolen some of her personal mail. She obtained her credit report and informed the officials to close her outdated accounts.
But upon checking the report again recently she discovered that those accounts had never been closed. In her own words: "I couldn't believe how many accounts were still on there, accounts I'd closed but were still listed as open - and some I'd never seen before".
In a study conducted by Uspirg in 2004, it was found that 25 percent of credit reports have flaws in them and some of these flaws are so serious
they can even negatively impact your credit score. Again in 2002 Consumer Federation of America found in its study that the different flaws scattered about in the reports had caused the bureaus to generate different scores that were dissimilar from each other.
In the words of Travis Plunkett, legislative director of the group: "We're still hearing that the credit bureaus are not adequately addressing the problem of credit report errors."
When you discover an error in your report you are responsible for getting in touch with the credit bureau or the place from where the mistake originated and giving them the right information so that the matter can be cleared up. Keeping meticulous records can be time-consuming and even irritating but it's the only way you will be able to dispute mistakes. When mistakes occur your credit score will plummet drastically.
It can be frustrating to discover mistakes connected to your personal information especially when you know that there is little or
nothing you can do about it. Although you can file your case on the Internet as the online reports give you that facility, you don't have a lot of space in the online forms to render your argument
However Mr. Plunkett and others urge you to make maximum use of your free reports no matter how flawed they are. In his words: "It's easier than it's ever been to get your credit report and evaluate the accuracy of it, And given that credit scores are being used increasingly to determine your financial fate, we strongly encourage people to look at their report at least once a year and do their best to correct any mistaken information."
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