The nation's credit bureaus, lambasted by consumers and consumer groups for inaccuracies and slowness to respond to information requests, are cleaning up their act.
Legal agreements between a number of states and two of the three major credit bureaus, TRW Corp. and Equifax, have mandated improvements in recent months. In addition, legislation designed to boost credit bureau efficiency and service will go to the floor of the U.S. House this fall.
Already, TRW has begun providing one complimentary credit report each year, regardless of whether you were turned down for credit or not. (All agencies give a free report copy if you were turned down for credit because of a report.) At the same time, the industry has moved to 30 days as the maximum wait for results of a bureau's investigation of consumer-disputed information.
"With or without new pending federal legislation, credit bureaus will be expected to meet higher standards of competence, diligence and accuracy," said Elgie Holstein, president of the non-profit Bankcard Holders of America. "One concern with legislation is that it shouldn't preclude individual states from setting more stringent requirements on credit bureaus if they wish."
Whatever improvement there is, it's your responsibility as a consumer to keep track of the accuracy of reports bearing your name. That information plays a big role in the decisions of banks, car dealers, credit card firms and finance companies on whether to grant you future credit. It's worth monitoring every year.
Remember that the information in question in many cases is from the creditor, so you must not only resolve the problem with the bureau but with the creditor as well.
"People have frequently found that information in their credit report may not even be theirs at all, but rather about a relative with the same last name or someone with a similar Social Security number," said Lisa Burba, a credit counselor with United Charities in Chicago. "Hopefully, as a result of the settlements with the two credit bureaus, accuracy will improve and consumers now will be responded to quicker."
The information that credit bureaus collect includes personal statistics, such as name, addresses past and present, Social Security number and employment information. A second portion involves individual account data, including whether accounts went into collections and whether charges are being disputed. A third section considers your legal record, such as marriage, divorce, judgments and liens.
"It's somewhat surprising to people when they find out how little information is actually in a credit report," said Oscar Marquis, a vice president with Trans Union Co., one of the nation's three major credit bureaus. "There's basically your credit card and loan payment history, but no details on items such as your income, banking or checking."
Negative information can be reported legally on your credit report for seven years. Bankruptcies are reported for 10 years and tax liens stay on your record seven years after the date paid. The three major credit bureaus represent data differently and use abbreviations that make reading a report a challenge. If you find specific information on your credit report is incorrect, the credit bureau will send you a dispute form.
To obtain a complimentary TRW credit report, write to TRW, P.O. Box 2350, Chatsworth, Calif. 91315.
Contact Equifax at P.O. Box 740241, Atlanta, Ga. 30375 and Trans Union, P.O. Box 7000, North Olmsted, Ohio 44070. Maryland law caps the charge at $5.Be sure to include your full name, address and Social Security number on all requests.
The informative brochure "Understanding Credit Bureaus" outlining all the basics and your rights is available for $1 (check or money order) from the Bankcard Holders of America. Write to BHA, 560 Herndon Parkway, Suite 120, Herndon, Va. 22070.