It’s the time of year when I remind you to consider accessing your free credit report. The Federal Trade Commission recently released its study of the U.S. credit reporting industry and found that 5 percent of consumers had errors on one of their three major credit reports.
Why does this matter?
According to Nancy L. Granovsky, professor and Texas A&M AgriLife Extension family economics specialist, these errors, if left uncorrected, can result in the affected consumers having to pay more for products like auto loans and insurance. Even worse, employment applications can be affected.
This is a first-of-its-kind study that provides research-based information regarding the problems that exist with credit reports. The results support the need for consumers to regularly check their credit reports for accuracy. Otherwise, loan products may end up costing more money if the wrong information about consumer finances and bill-paying history stays on the credit reports. The wrong credit report information can lower the overall credit score and result in higher interest rates for borrowers.
It’s important to request a copy of your credit report every year from each of the three credit reporting agencies (Experian, Equifax and TransUnion). Stagger the requests. Get one copy from one of the agencies now, then request a copy from a second agency four months from now. Make the final request from the remaining agency four months after that.
Consumers are eligible to receive one free report from each of the three credit reporting agencies every year. Always go to the official government-sponsored website to request the reports, not to the individual credit reporting companies. At the official site (www.annualcreditreport.com), you can designate which report you wish to order.
Under the Fair Credit Reporting Act, both the credit reporting agency and the information provider (retailer, credit card issuer, etc.) are responsible for correcting inaccurate or incomplete information. Consumers must communicate in writing.
For information on writing a letter that communicates the errors found in the credit report, call the Extension office at 940-627-3341.
Tanya Davis is a Wise County Extension agent.