Keeping good credit starts with reports

by Eve Mitchell, Contra Costa Times

  • Consumers find mistakes, identity theft that adversely affect scores
  • Credit reports show the good, the bad and the ugly in a financial life.
    They also provide the basis for calculating a credit score, which,
    among other things, is used to determine what interest rate is paid on
    a loan or whether a loan is granted in the first place.

    That’s why it’s so important for consumers to obtain a free credit
    report once a year from each of the country’s three major credit
    reporting bureaus: Equifax, Experian and TransUnion. Passage of a
    federal law in 2003 made this possible.

    Going over credit reports can reveal whether there are mistakes that
    could lower a credit score and whether identity theft has occurred.

    Sandra Chapin, program director at the San Mateo-based Consumer Federation of California, ordered her credit reports a few weeks ago.

    It’s a practice that already paid off. When Chapin first requested her
    credit reports in 2005, she found a mistake. It said she was 90 days
    behind in making a payment on a bill that had been paid.

    "There was some negative credit reporting on my report, and those were
    in error," said Chapin, who contacted the credit-reporting bureau and
    the creditor to get the matter cleared up.

    The mistake that Chapin found on her report is not an isolated
    incident. One in four credit reports contain mistakes that can cause
    consumers to be denied credit, an apartment rental, a home loan or a
    job, according to the most recent information available from the U.S.
    Public Interest Research Group. The 2004 survey findings were based on
    information collected from about 200 consumers in 30 states who had
    reviewed their credit reports for accuracy.

    "Everyone should have a sense of what their credit state is, and the
    best way to do that is to review a copy of your credit report from the
    three major credit-reporting bureaus," said Norma Garcia, senior
    attorney for the West Coast office of Consumers Union in San Francisco.

    "Often the information across the three bureaus is not consistent. Say
    you bought a car and financed the car and paid off the loan. That’s
    good. But it’s possible the payment history information only shows on
    Experian and not TransUnion or Equifax," Garcia said.

    Reviewing a credit report also can be used to determine victims of identity theft.

    "You can make sure no one is opening up an account in your name.
    Identity theft is huge right now, and it’s happening on so many
    different levels," said Chapin.

    A report released in November by the Federal Trade Commission found
    that 8.3 million Americans adults were victims of identity theft in
    2005. That includes 3.2 million who experienced misuse of their credit
    card accounts and 1.8 million who found new accounts were opened or
    other frauds were committed using their personal information.

    Since the free credit report program launched in December 2004, more
    than 52 million reports have been distributed at no cost to consumers
    during a two-year period ended in December 2006, according to the
    Consumer Data Industry Association.

    The law that made it possible to get a free credit report also makes it
    possible to get free yearly reports maintained by specialty consumer
    reporting agencies that keep tabs on insurance claims, medical records
    and employment history.

    To order a free credit report, visit or call 877-322-8228. The law provides consumers with a free credit report but not a free credit score.

    Chapin noted that ordering a free credit report online can be frustrating and confusing.

    "I suggest people do it the old-fashioned way and call. (The online
    site) is difficult to understand, and you can easily click the wrong
    key," she said.

    Consumers who choose the online route should make sure they go to and not some other site, said Garcia.

    "That is the only portal to the truly free credit report. That is the
    site the federal government required the three member credit bureaus to
    establish to provide free credit reports," she said.

    Other Web sites link the offer of a free credit report to trial memberships in credit-monitoring services, said Garcia.

    For example,,
    which is operated by Experian, provides consumers with a free credit
    report and credit score when they sign up for a 30-day trial
    credit-monitoring membership. Although there is no charge for the trial
    membership, consumers must cancel their membership before those 30 days
    are up or they will be billed $14.95 for each month they continue using
    the credit-monitoring service.

    One way to create a cost-free credit monitoring service is to stagger
    requests for free credit reports over the course of a year, said Kam
    Coveyou, spokeswoman for the state Office of Privacy Protection.

    "You can have a no-cost credit monitoring service by spreading out the
    reports and ordering them from a different bureau every four months,"
    she said.

    There are a couple of things in credit reports that could be red flags, Coveyou said.

    "In the personal data section, look for addresses where you have never
    lived. For one thing, a person could be getting a credit card in your
    name using your information but have (a different billing address).
    They might by paying the bill for a couple months. And then they stop
    paying the bill, and you get a call from the collection agency," she

    Make sure the name and other personal information is correct, Coveyou said.

    "You want to make sure your name and any variant of it and your Social
    Security number and employment are correct. If there is anything
    different on there, that’s a red flag that someone should call the
    credit bureau and ask, ‘Why is this on there?’" Coveyou said.

    More information about ordering free credit reports can be obtained by
    calling the state Office of Privacy Protection at 866-785-9663 or

    Eve Mitchell covers personal finance. Reach her at or 925-952-2690.


    You can order your free annual credit reports through a toll-free phone number, 877-322-8228, or by visiting You can also download a form requesting a free credit report from the Web site and mail it to:

    Annual Credit Report Request Service P. O. Box 105281 Atlanta, GA 30348-5281

    Reports ordered by phone or through the mail will be sent within 15 days. Allow two to three weeks for delivery.

    Credit scores are not free: Here are the prices:

    Equifax (800-685-1111) charges $7.95

    Experian (888-322-5583) charges $5.95

    TransUnion (800-916-8800) charges $7.95


    To check your reports for errors or possible signs of identity theft, look especially at three areas:

    1. Look in the Personal Information or Personal Data section. Look for
    addresses where you’ve never lived. Make sure your name and any
    variations of it, your Social Security number and your employers are

    2. Look in the Accounts sections. Look for any accounts you didn’t
    open. Look for balances on your legitimate accounts that are higher
    than you expect.

    3. Look for Inquiries or Requests for Your Credit History that you
    didn’t make. There are two types of inquiries. "Regular" or "hard"
    inquiries are the ones that result when you apply for credit or when an
    account is transferred to a collection agency. This is the kind of
    inquiry you should check as possible identity theft or error. The other
    type, "promotional" or "soft" inquiries, would not be an indication of
    problems. This type includes preapproved credit offers, checks for
    employment purposes, account monitoring by your existing creditors and
    your own requests for your report. You can view sample credit reports,
    with the different sections explained, on the Web sites of the three
    credit bureaus:, and

    If you see anything in your report that you believe is incorrect,
    contact the credit bureau immediately. You can call the telephone
    number on the report to speak with someone at the credit bureau. If you
    find evidence of identity theft, the next steps to take include
    contacting any creditors involved to close fraudulent accounts and
    filing a police report.