New federal rule lets you see your credit report
Starting in December, consumers will be able to request a free copy of their credit report once every 12 months from one of the three nationwide reporting agencies.
This comes after the Federal Trade Commission (FTC) issued its final rule regarding the free credit reports under the Fair and Accurate Credit Transactions Act (FACTA) and the Fair Credit Reporting Act (FCRA).
The rule, issued in June of this year, requires credit reporting agencies to release a free copy of their credit report to consumers once a year upon request.
The new rule will go into effect gradually. The roll out will take place from west to east beginning Dec. 1. Arizona is one of the first states in which consumers will become eligible to issue requests.
According to the FTC, credit-reporting agencies will have to establish a centralized source for accepting consumer requests. The source must have a dedicated Web site, toll-free telephone number and a postal address.
The final FTC rule also provides that the centralized source:
• Must have adequate capacity to accept requests from the reasonably anticipated volume of consumers making requests.
• May collect only as much personally identifiable information as necessary to process requests.
• Must provide clear and easily understandable information and instructions on how to make requests.
• May not include any advertising or marketing that interferes with, detracts from, or undermines the purpose of the centralized source.
Ann Christy is the Cottonwood branch manager for Wells Fargo. She said the new rule is great for consumers. There are many things they should look for on a credit report, she said.
Lori Simmons is the bank's business relationship manager and works as a business lender. She looks at credit reports every single day and says it is critical that people know what is on theirs.
Credit scores mean a lot when it comes to gaining additional credit or loans. A score in the 820-840 range is close to "perfect," Simmons said.
People who have scores in the 700s are doing well. At Wells Fargo borrowers usually must have a score of 650 or higher to get a loan.
There are many factors that go into calculating a score.
Simmons said repayment history, available credit and usage are all looked at.
"The more you use and pay off, the better your score," she said.
Credit card accounts and loans stay on the reports for 10 years, Simmons said. So do bankruptcies.
"Every little thing is reported," she said.
Identity theft is something that can be discovered through a credit report.
Simmons said it is very important to check name, address and social security numbers once you obtain your report.
Looking at the section that lists recent credit inquiries is also important. The inquiries reveal what companies have obtained a credit history. If the businesses or lending companies are not familiar ones, it could mean someone has gotten a hold of your personal information and is using it to open accounts.
If a consumer suspects identity theft, they should report it immediately, Christy said. Incorrect items can take 30 to 60 days to remove from a credit report.
Information on the three nationwide consumer-reporting agencies Equifax, Experian and Trans Union is available on line. The agencies' Web sites also have information on how to dispute items on credit reports.
For more information on the FTC's rule, go to www.ftc.gov.