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Jordan Goodman is the author of Everyone's Money Book, available at 888-201-6300. This is the third edition of the book. You can also visit his Web site at www.moneyanswers.com. He talks with us on Thursday mornings.
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July 24, 2003
"Implications of the New Fair Credit Reporting Act"
With the federal Fair Credit Reporting Act (FCRA) expiring at the end of 2003, Congress has been hard at work looking at the entire consumer credit
reporting system to see how the system is working and how it needs to be
improved. In late July, after extensive hearings, the House Financial
Services subcommittee passed the Fair and Accurate Credit Transactions Act
of 2003. This bill is likely to pass the full Financial Services committee
and the House in the next few months, and then be passed by the Senate and
go into law by the end of the year.
The bill has several elements that would overhaul the current credit
reporting system and attempt to protect consumers against identity theft.
Here are some of the implications of the bill, as it might affect you and
your credit:
- Free credit reports: You would be able to write all three credit bureaus,
Experian, Equifax and Trans Union, and get a free copy of your credit report
once a year. Right now, free reports are mandated in a few, but not most,
states.
- Free credit score: Credit bureaus would also have to provide you with
your credit score at least once a year, as well as when you request it. If you
forget to ask for it, the bureau would have to remind you that you can get
your score at the same time you get your credit report. Right now, it is
mandatory that you be able to see your credit score in only California and
Colorado, so this rule would allow many more Americans to see their scores.
- Notification of negative information to credit bureaus: Creditors would
be forced to notify consumers whenever they're reporting negative
information, like late payments, judgments and liens, to the credit
bureaus. The creditor would have to mail you this notice no later than 30
days after it sent the information to the credit bureau. The idea is that
consumers would be able to prevent erroneous negative information from
getting on their reports in the first place if they knew what was about to
be reported. With this information, you could challenge wrong negative
information with the credit bureaus before it lowered your credit
score.
- Prevent ID Theft: The bill would make it easier to find out if you have
become a victim of ID theft and make it somewhat easier to recover if your
ID has been stolen and your credit score has been damaged. The credit bureaus would
have to make it as easy as possible to get negative information caused by
the ID thief off of your report and help you restore your good credit name.
While it is likely that this bill will be passed, it is important for you to
stay on top of your credit score to make sure it is
accurate, and to know what your credit score is. One service that will help you
do this is the Privista service at www.guardmycredit.com, where you can see
your full credit report and score anytime you like.
For More Financial Tips From Jordan Goodman
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