By Marcie Jessee
Thanks to a provision of the Fair and Accurate Credit Transactions Act, which came into effect this month, Utah residents can get a free annual credit report from one of the three major credit bureaus.
The act was signed into law December 2003 and set up a timetable for states to receive the free credit reports, and Western states like Utah were the first to be eligible. The law will take affect for Midwestern states on March 1, 2005, Southern states are on June 1, 2005, and finally the Eastern states on Sept. 1, 2005.
Credit reports provide potential lenders with information on a person''s financial history of loans, credit cards and payments. Perfect payment history is not necessary to get a good score, but bad credit, created by poor repayment history and large debts, results in a low score, which tells lenders they are taking a risk by lending money.
'Your credit scores will affect the rate you get when you apply for a loan,' said Kristen Wilde, director of communications for Utah Bankers Association. 'The better score you have, the better interest rate you''ll get. If you''re watching your score you can make sure you have a better score.'
Wilde recommended Utah residents take advantage of the free credit reports by checking their credit score once a year from one of the three participating companies, Equifax, Experian, and TransUnion.
Mike Peterson, vice president of the American Credit Foundation, a consumer credit counseling service in Draper, said residents should regularly check their credit reports for inaccuracies and discrepancies that could hurt their credit score.
'Today, I don''t think a lot of people , because they don''t want to pay for their credit report,' Peterson said. 'It will be nice to be able to have that once a year and be able to look in and see whether or not your credit report is accurate.'
Peterson said inaccuracies often occur when people with the same name have credit histories that get switched.
'There are 500 Mike Peterson''s in Utah, and you pull your credit report, and you find that another Mike Peterson has an issue on there for something that has taken place,' Peterson said. 'If you''re watching for those things you can dispute them.'
Peterson said many of the clients working to get out of debt on ACF''s program would find credit or purchases on their report that do not belong to them, and those inaccuracies need to be disputed quickly with the credit agency.
Inaccuracies on credit reports also show up when a person has been a victim of identity theft.
In 2003, there were 1,326 identity theft complaints from Utah victims according to a report by the Federal Trade Commission. The city with the highest number of victims was Salt Lake City with 310. The highest percentage of identity theft victims was due to credit card fraud at 29 percent, and bank fraud followed closely behind with 26 percent.
Wilde said a good indicator that someone has stolen your identity is seeing credit cards on a credit report that the person has never applied for.
'If you feel like your identity has been compromised ... then you might want to check it more often to see if there are items showing up on there that would indicate that,' Peterson said.