Free credit reports available

As of Sept. 1, all Americans can obtain free yearly copies of their credit reports, according to The Fair and Accurate Credit Transactions Act of 2003.
The FACTA is an amendment to the 1970 Fair Credit Reporting Act that regulates credit reporting to provide consumers with protection from inaccurate and inappropriate disclosures of personal information by consumer reporting agencies.
Signed into law by President George W. Bush in Dec. 2003, the FACTA gives consumers a chance to obtain free copies of their credit reports instead of having to pay for them as they did in the past.
Free credit reports became available between Dec. 1, 2003 and Sept. 1, 2005 depending on the residency of applicants. Applicants on the west coast of the U.S. were the first to apply for their free reports, while residents of the northeast U.S. were the last. Louisiana residents were able to get their free reports June 1.
State Treasurer John Kennedy said all Louisiana citizens who have not obtained free copies of their credit reports should do so.
“It’s extremely important for citizens in our state to know their credit history, especially to correct possible errors or update information on their credit reports,” Kennedy said in a press release.
“Banks and other businesses will use your credit report for a variety of reasons,” he said. “If you are trying to rent an apartment, purchase a new car, or apply for a home mortgage.”
A credit report is a detailed document that contains a consumer’s personal information, credit habits and history. They are used by creditors to evaluate a persons’ eligibility to obtain credit and the interest rates at which money can be borrowed.
“Your credit report defines your character to lenders by your history with credit and how well you pay your bills,” said Jessica Slate, a certified credit counselor with American Consumer Credit Counseling.
Slate also said a credit history contains information submitted by creditors about a person’s use of credit over time. It includes account details, such as the dates accountants were opened, credit limits, the amounts of loans borrowed, payment terms and payment history.
Credit histories also reveal late payments, delinquent credit obligations, incomplete credit applications, liens, repossessions and bankruptcies, Slate said.
“Negative information in a person’s credit history remains on their credit report 7 to 10 years,” she said. “While positive information is always part of a person’s credit history.”
Pammila Phillis, writer for CardRatings.com, said it is important for consumers to obtain copies of their credit report to check for any errors.
“Errors on credit reports are common, but can usually be corrected easily without seeking outside help,” she said in her report, “How to Dispute and Correct Errors on a Credit Report.”
To right the wrongs, consumers should contact creditors or send letters of dispute to credit reporting agencies to have errors corrected. By law, credit reporting companies have 30 days to investigate claims and reply back with the results.
“If you do not receive your dispute within 30 days, it is your right to write back in and request that they complete updating the credit report as you requested,” Phillis said. “If the disputed creditor fails to respond to the credit reporting agency’s query for update, then, unless they deem your dispute as frivolous, they have no other option but to abide by your request for the update.”
In conjunction with free credit reports, the FACTA also included a credit score disclosure rule that requires credit reporting agencies to provide consumers with their FICO scores for a reasonable fee.
Established by the Fair Isaac Corporation, a FICO score is a credit rating most lenders use to base their approval from.
“It’s a mathematical scoring model based on information in a person’s credit report,” Slate said. “It accounts for new credit, types of credit in use, length of credit, amounts owed, and payment history in its computation.”
A credit score can range from 300-900, she said. “A person with excellent credit history will score 730+. Conversely, a high-risk borrower will have a credit score between 585 to 669.”
CREDIT’S HISTORY
1812 – New York Company Cowperthwaite & Sons begins
– Selling furniture on installment” plans
– Competitors soon follow
 
1831 – Fixed monthly mortgage payments are introduced
– First building and loan association is formed
 
1914 – Western Union, and a few department stores issues the first charge cards
 
1950 – The Diner’s Club becomes the first card that can be used at more than one business
 
1969 – Union Tank Car transfers into the credit reporting industry becoming the first to automate credit reporting
 
1970 – The Fair Credit Report Act is enacted
 
1995 – Credit cards overtake cash payments
 
2001 – TrueCredit becomes the first company to offer consumers access to their credit scores