|
-
- |
Starting today, Virginia consumers can get free copies of their credit reports, thanks to a new federal law aimed at tackling identity theft.
The Fair and Accurate Credit Transactions Act, signed into law by President George W. Bush in 2003, gives victims an easier way make sure their credit information is correct and hasn't been stolen.
It allows consumers to review annually, for free, their credit reports that have been compiled by any of the three major credit bureaus--Equifax, Experian or TransUnion.
But do not call the bureaus for a free report. The information is available only through a central clearing house, the Annual Credit Report Request Service.
Consumers can order their free credit reports three ways:
by visiting annual creditreport.com;
calling 877/322-8228;
or mailing an Annual Credit Report Request Form to: Annual Credit Report Request Service, Box 105281, Atlanta, Ga. 30348-5281.
Jennifer Hogg, a financial specialist for ClearPoint Financial Solutions in downtown Fredericksburg, said credit reports are like report cards that can determine a person's financial future.
"Credit reports provide information to lenders, prospective employers, insurance companies and other interested parties about consumer's finances and spending habits," Hogg said. "It is important that consumers know what is contained in their credit reports and that they are accurate, because it could make a difference in their loan rates, insurance rates and their ability to get a job."
She said that within the past year, 9.3 million Americans have become victims of identity fraud, and up to 85 percent of those victims didn't know until they were denied credit or received calls from creditors.
According to the latest study by the Federal Trade Commission, Virginia ranks 22nd among states in terms of identity-theft victims. That's down from 19th place last year. Richmond was the top city in Virginia, with 373 reported victims.
Arizona had the most victims of any state.
Virginia is one of the last 14 states in the country affected by the free credit report law.
People living on the West Coast were allowed to request a free credit report last December; for those in the Midwest it was March and for those in Southern states it was June.
Currently, the cost of the credit reports from the three main credit bureaus ranges from $9.50 to $14.95 each.
Under the previous law, the price of a credit report was based on the reason for wanting it, the state one lived in and how the report was ordered.
But the reports were free for anyone who was on welfare, unemployed and looking for a job, or if they suspected fraud due to identity theft.
Consumers also should be careful when trying to get a free report.
"Consumers also need to be on the alert about imposter sites--sites that misspell annualcred itreport.com or use sound-alike names, but don't link to the authorized site," said Lydia Parnes of the Federal Trade Commission in a prepared statement. "We are sending letters to operators of more than 130 imposter sites to inform them that we know they are out there and that attempts to mislead consumers are illegal."
Consumerinfo.com, an Experian affiliate, agreed to settle charges by the FTC last month that it deceptively marketed free credit reports. The FTC said the company's Web sites failed to explain that consumers would be automatically charged a $79.95 membership fee after the free trial expired.
Consumers also need to know that a credit score will not be provided with the free credit report. That's going to cost about $5 from one of the credit bureaus.
Credit scores are used by lenders to determine whether they will decide to grant the consumer credit, Hogg said.
The majority of the lenders rely on the FICO system, which rates the credit score on a scale ranging from 300 to 850.
Consumers with scores over 780--about 20 percent of the population--typically receive the best rates, she said.
"It is important that consumers learn about, and take control of, the information on their credit reports," she said.
Overspending, reduced income, death in the family, unemployment, medical expenses, and separation or divorce are among the purchasing habits and life events that can result in a lower credit score Hogg said.
Ways to improve credit scores include paying credit card balances down or off, making payments on time and not opening new accounts.
The Fair and Accurate Credit Transaction Act also mandates that creditors notify consumers if they find negative information on their credit reports. Creditors also cannot pass that information on if consumers have reported their identity as stolen.
President Bush also signed a bill into law that will add a mandatory two years to prison terms for those who were convicted of a felony while claiming another person's identity. Thieves who use that information to commit a terrorist act will spend an extra five years in prison.
The law is meant to take away judges' ability to give probation, reduced sentences or concurrent sentences for identity theft linked to felony crimes.
To reach PORTSIA SMITH:
