December 2003

The President has signed a new law that will give consumers a free annual credit report from each of the three major credit reporting agencies. Along with many of the consumer groups, I’ve been arguing for years that since credit bureaus make massive amounts of money selling our data without our permission, the least they could do is to provide us with free copies of our reports so we can make sure they’re correct. Now that’s finally become law.

A great deal of this new law is devoted to trying to thwart identity theft: a silent, often anonymous, crime that wrecks havoc on millions of Americans’ financial lives. If you’re a victim, you can usually count on spending about a month’s worth of your life trying to sort out the mess.

To help ID theft victims, the new law allows consumers to place fraud alerts on their credit reports instructing other lenders not to open new accounts without contacting them first. Active duty service people will be able to place alerts on their files to prevent credit lines being opened while they are deployed. Consumers will also be able to ask the credit bureaus to block accounts opened by a thief, so they won’t be seen by other creditors or used to calculate credit scores.

This can be a big help for those who learn that their information has been hijacked and still need to borrow for a mortgage, car loan, or other reasons.

Other helpful provisions include the requirement that lenders send consumers a notice telling them that they will report an account as late to the credit bureaus before they do that for the first time, and the right of consumers to directly dispute incorrect items on their reports with the lenders that reported the mistakes.

While overall the new law is a victory for consumers, don’t get too excited yet. It will take six months to a year for much of it – including those free reports – to go into effect. And even when it does become effective, you may still want to monitor your credit report on a monthly basis to spot unauthorized access to your credit report early.

Free Reports are Coming:

The Federal Trade Commission has announced the schedule for providing consumers with one free copy of their credit report from each of the major consumer reporting agencies, upon request. This was one of the changes required by the Fair and Accurate Credit Transactions Act that became law in December 2003.

So as not to overwhelm the credit bureaus, the FTC has announced the following schedule for consumers to request their credit reports:

• Western States beginning December 1, 2004:
Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming

• Midwestern states beginning March 1 2005:
Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin

• Southern states beginning June 1, 2005:
Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, and Texas

• Eastern states beginning September 1, 2005:
Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia.

Also, Puerto Rico and all U.S. territories will become eligible on September 1, 2005.

There will be one centralized source for requesting your report, and it will include a dedicated Internet Web site, a toll-free telephone number, and a postal address.

In addition, you’ll be able to request a free report annually through nationwide specialty consumer reporting agencies, such as those that keep records on employment history, tenant history, medical records, and insurance claims.

While the new law is a step in the right direction, it’s ultimately our responsibility to make sure our credit gets – and stays - in top shape.

For more information on how to build and maintain great credit, visit the Success DNA Credit Center at SuccessDNA.com. or our home page at www.BusinessCreditSuccess.com.

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