Presently, most financial endeavors revolve around a consumer's credit file. If the consumer has made any purchases in which a credit application was first required, he or she has credit history -- and thus, a credit file. Each consumer has access to a “tailor-made” version of his or her credit file -- called a credit report.
A credit report is an essential asset in a consumer's financial journey. It details a list of debts that are paid or currently owed -- as well as any judgments or liens against the specific consumer. The credit report also details a list of inquiries made by various entities. However, the credit report does not include the credit score.
Sales Transactions and Consumer Reporting Agencies
In the United States, there are three major consumer reporting agencies: Experian, Equifax and TransUnion (another name for “consumer reporting agency” is “credit reporting agency”). Under the Fair Credit Reporting Act, these companies are supposed to promote accuracy, precision and the privacy of all consumers' information. However, these companies sell the consumer's credit report information to creditors, employers, insurers and any other businesses which could benefit from its use, financially.
These sells are the “inquiries” found on the credit report. A consumer may be unaware he or she agrees to the entity's inquiry. The legal jargon, often times, looks like a regular step in the application process. This step is optional. An entity cannot make an inquiry without consent from the specific consumer. However, that entity can -- and most often times will -- immediately deny the consumer any potential rights, privileges or benefits if he or she does not grant the entity permission to place the “soft inquiry.” Yet, it may claim that the denial was made for another reason.
The Consumer Has Annual Access to the Credit Report
Under the Fair Credit Reporting Act, a consumer can obtain a copy of his or her credit report from each of the three consumer reporting agencies, once every twelve months, not once per year. The consumer has to wait an entire 12-month cycle before obtaining another copy from each of the three agencies through this method -- which means that the consumer can obtain one copy from Experian, one copy from Equifax and one copy from TransUnion.
There are several websites that offer access to the consumer credit report via “free trial” or a small fee. However, according to the United States Federal Trade Commission, the only safe website from which a consumer can obtain those annual free copies is Annual Credit Report.
The consumer selects the consumer reporting agency from which he or she wants the report -- then proceeds with the instructions given. If the consumer does not want to view the credit report online, he or she can receive it through postal mail. He or she still needs to go to the mentioned website and print the request form -- or request that it be sent through postal mail. Once the request form is filled out, it should be returned to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
The consumer should not write to each individual consumer reporting agency, itself, separately for the annual credit report. The process does not work that way.
The Consumer Can Get a Free Credit Report Anytime He or She is Denied Credit
The consumer can access his or her credit report anytime during the year if denied any type of credit. The entity which denies the consumer has to provide him or her with an explanation of the denial. In that statement, the entity tells the consumer which reporting agency furnished its copy of the consumer's credit report.
Under United States federal law, the reporting agency is required to supply the consumer a free copy of the report, if he or she submits a request to that specific reporting agency within 60 days of the denial letter. After 60 days, the obligation is void. This is the only time the consumer should write to the specific reporting agency for a free credit report. Otherwise, the consumer should request via the Annual Credit Report website.
Certain States Grant Free Year-Round, Credit Report Access for Consumers
If the consumer is a resident of the following states, he or she has free access to his or her credit report all year -- whether accessed through the website or written request:
- Colorado
- Georgia
- Maine
- Maryland
- Massachusetts
- New Jersey
- Vermont
This provision is made under state law, not federal.
Each consumer has his or her own financial responsibility. Everyone needs to know what is and is not on record. It is wise and beneficial to obtain a copy of the credit report -- via any of the above-mentioned solutions.
Sources
- Federal Trade Commission: Consumer Protection: Your Access to Free Credit Reports
- Federal Trade Commission: Free Reports: Free Annual Credit Reports
- Federal Trade Commission: Statutes: Fair Credit Reporting Act
Disclaimer: The information contained in this article is for educational purposes only and should not be used as legal advice or to guide consumers, financially, without the opinion of a financial or legal professional. Any reader who is concerned about his or her legalities should contact a financial consultant or lawyer for advice.
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