Did you know that under U.S. law, you have the right to a free consumer credit report annually?
The first step in any credit reporting issue is to get a copy of your credit reports with each of the three major credit reporting agencies: Equifax, Experian and Trans Union. You have a right to a free copy of your credit reports from each of the 3 major credit reporting agencies. To get your free copy, you can order it through the web site set up by the Federal Trade Commission at www.annualcreditreport.com. You can also order it by mail using the form provided at that web site. After getting your annual credit report, you should check all the entries to see what if any do not belong to you. These would be accounts that you never opened or you closed and therefore should not show any activity. You may likely find entries for people with similar names, that live near you, relatives, etc. Particularly if the information reported is negative, like “in collections,” or late payment history or financial institutions checking your credit in relation to a request for credit, you should correct this information because it is probably affecting the price you pay for credit, preventing you from getting credit or even increasing your costs for insurance and other necessities. To correct the information, you need to send the credit reporting agency that is reporting the bad information notice of your dispute over the specific items.
You can also order your credit reports for a fee from many online sources or from www.annualcreditreport.com. You will have to pay for your credit reports if you already received your free reports in the past year and no other exception applies, such as the denial of credit within 60 days or possible identity fraud.
When you order your credit reports, be careful about other services the source may try selling you. Many want you to sign up for credit or identity theft insurance, access to your consumer reports on an ongoing basis, credit monitoring (notice when your report changes), and other services. Consider whether you really need these services, and try to find out other consumer’s experiences with the particular company if you think you want to buy the service. Also, the service is likely to require mandatory binding arbitration should the service not perform its promises to you, which is a significant issue if you are buying some type of insurance or credit monitoring service. This may mean that if you have a dispute, you may lose your right to file your claim locally, in your area, and the right to have your claim heard by a jury of your peers and instead you will have to file a claim in some location picked by the vendor and have the claim heard by some smaller group of people that likely handle these claims for the vendor on a frequent basis. Most consumer advocates feel that mandatory arbitration in consumer matters strips consumers of significant rights and is against consumer interests in many other ways.