Make Annual Credit Reports a Priority

Did you know that the more money you have and the better your credit, the more you are a target for identity theft? It's a bit like Willie Sutton's old quote about why he always robbed banks: "Because that's where the money is."

The growing opportunities for identity theft make checking your credit report a priority. The first place identity theft often shows up is in a credit report. Knowing what is on your credit report and getting errors corrected promptly is your best defense against bad credit scoring and identity theft.

A good credit report is also essential for getting:

• good financing rates
• good insurance rates (insurance companies claim that there is a direct relationship between a consumer's payment history and the number of loss claims they file) and
• even a good job

Almost 80% Contain Mistakes

Aside from identity theft issues, according to a study released by the National Association of State Public Interest Research Groups, almost 80% of credit reports contain either serious errors or other mistakes of some kind. These errors can result in the appearance that the consumer:

• has "too much" credit available
• is overextended or
• is not a responsible payer

In 2005, the Fair and Accurate Credit Transactions Act (FACT Act) took effect, enabling consumers — by contacting a single number, web site or address — to request their credit reports from the three major credit bureaus at no charge once a year.

How to Get a Free Credit Report

Order your free report now if you have not done so this year and make a habit of doing so annually. You can order your free annual credit report:

• online at www.annualcreditreport.com
• by calling 877-322-8228 or
• by completing the Annual Credit Report Request Form (available on line at www.annualcreditreport.com) and mailing it to:
  • Annual Credit Report Request Service
    P.O. Box 105281
    Atlanta, GA 30348-5281

The website www.annualcreditreport.com is the only authorized source for your free annual credit report from the three nationwide consumer reporting companies, so don't fall for marketing pitches from other organizations offering to provide you with a free credit report. Those offers typically come with strings attached.

When you contact www.annualcreditreport.com, request credit reports from all three of the major credit bureaus — Trans-Union, Experian and Equifax.

How to Handle Inaccuracies

If there are any inaccuracies on your report, talk with a representative of the credit bureau immediately and find out what needs to be done to correct the information. But don't stop there.

If you suspect identity theft, request that the consumer credit reporting companies place "fraud alerts" in your file to let potential creditors and others know that you may be a victim of identity theft.

A fraud alert can make it more difficult for someone to get credit in your name because it tells creditors to follow certain procedures to protect you. It also may delay your ability to obtain credit.

File an identity theft report with your local police at once. Notify any creditors you don't recognize that there is a problem with the account.

Under federal law, you are also entitled to a free report if you are denied an application for credit, insurance or employment. You must ask for the report within 60 days of receiving notice of the action.

You're also entitled to one free report a year:

• if you're unemployed and plan to look for a job within 60 days
• if you're on welfare or
• if your report is inaccurate because of fraud, including identity theft

Otherwise, a consumer reporting company may charge you for another copy of your report within a 12-month period.