Updated: May 3, 2013 12:14PM
Originally published: December 2, 2004
Here’s a great way to better manage your finances in 2005: Get a free copy of your credit report. Beginning in March, Illinois residents will be entitled to one free credit report from each of the three major credit bureaus every year -- a result of the federal Fair and Accurate Credit Transactions Act of 2003.
One of those bureaus, Experian, is jumping the gun, offering its report free during the month of December, as I explain below.
I think people avoid looking at their credit reports the way they avoid going to the doctor for a physical checkup. They simply don’t want to know what bad shape they’re in. But with identity theft on the rise, it makes good sense to check your credit report regularly. And, by the way, this document is no longer a series of confusing codes and jargon. If you haven’t seen your credit report lately, you’ll be surprised at how user-friendly it is.
There are three main credit bureaus: Experian, TransUnion, and Equifax, and they joined to create a single Web site to process requests for free credit reports: www.annualcreditreport. com. There, you can click on an icon for each of the bureaus. You can get all three reports at once, or you can get one every four months, spacing them out to catch any potential fraud.
What’s the chance that the reports will show different items? According to Don Girard of Experian, there’s a good chance that each report will have different information, since not all credit grantors report to all three bureaus. That would result in different entries on each of your files.
Instant credit reports
Many years ago, it was very difficult to get your credit report. Next year, we will have instant credit reports. The free credit-report plan is being rolled out across the nation in coming months, starting with Western states first. By April, you can apply online, give information securely over the Internet, and view your credit report immediately, then print it, or save it to a file on your own computer.
How safe is that, you wonder -- especially with all the warnings about not giving out your personal information? First, never respond to an e-mail soliciting information for a credit report. Just go directly to the Website of the credit bureau. You’ll be asked for information such as your name, address, date of birth, and your Social Security number. All of the data is encrypted as it travels over the Internet. But that’s just the start.
Then you move to the “authentication” page. That’s where you’ll be asked specific, detailed questions to which only you will know the answer. In fact, when I asked Girard to give me some examples, he hesitated, worried that fraudsters might get an edge.
“The questions are related to financial obligations that you currently have, and require detailed knowledge,” he explained. “This is not your mother’s maiden name type of question.”
Once you’ve been authenticated, your credit report will pop up on the screen. Do this in a secure place -- and be sure to close your browser, so no one else can go back to that report.
If you notice something unusual on your credit report -- an account that doesn’t belong to you or an attempt to establish new credit at a store -- you can easily register a dispute with a click of your mouse. Or, there’s a toll-free number to call for immediate action.
In fact, if you ever think you might be the victim of identity theft, you should contact any credit bureau, and they’ll spread the word to the others.
Although the free credit report plan won’t arrive in Midwest states such as Illinois until March, Experian is jumping the gun by offering the free report to consumers across the country during the month of December at www.FreeCreditReport.com. That’s a site Experian has been operating for five years, but users had to purchase a credit-monitoring service to get the free report.
Now you can get a free Experian credit report -- no strings attached.
An extra-cost service
Experian’s monitoring service, the Triple Alert Program, costs $4.95 per month and can be canceled at any time. It will monitor your files at all three credit bureaus simultaneously, and alert you to any inquiry into your file from someone trying to open credit. If that happens, Experian will send you an e-mail to the address you provide, and will send a text message to your cell phone. This new service is available only through the www. annualcreditreport.com site.
Your credit report will soon be free. Take the credit bureaus up on the offer. It will be priceless. And that’s The Savage Truth.
Terry Savage is a registered investment adviser. Distributed by Creators Syndicate.