When it comes to credit, your FICO score is what counts. If you're new to the credit or home buying game, FICO is probably a very mysterious and confusing word. You probably already know it has something to do with credit; but do you know exactly what your FICO score is and means? If not, read on.

Getting Free Credit Reports Will Require Some Effort

by Michael Anderson

Federal legislation giving consumers the right to a free credit report took effect in December, with a nationwide roll-out that began with Western states. The law requires the three national credit-tracking companies Experian, TransUnion, and Equifax to provide consumers with free credit reports once a year.

Consumer advocates say that the importance of consumers monitoring their credit histories has never been greater. That was underscored last week with revelations that a security breach at ChoicePoint Inc. might have revealed to identity thieves the personal data of some 145,000 people nationwide and 830 in Wisconsin.

"The government wanted to provide consumers with tools to guard against identity theft," said Loretta Abrams, national director of consumer affairs with financial services company HSBC North America.

A total of 2,646 Wisconsin residents reported being victims of identity theft last year, a 14% increase from 2003, according to the Wisconsin Bankers Association.

Agencies block referral links

Although interest in credit reports may be high, consumers will face some frustration when they try to access the information using the Internet.

The credit reporting agencies have blocked referral links to the Web site, www.annualcreditreport.com.

That means clicking on the Web address from other sites such as those in online media articles will not lead to the site, according to Norma Garcia, senior attorney for the Consumers Union West Coast Office in San Francisco.

Consumers Union has not determined why the agencies blocked referrals, and filed a complaint with the Federal Trade Commission about the matter.

Representatives of the three credit agencies could not be reached for comment.

Because of the block on referral links, the number of Internet hits received by the credit report site is low. That, in turn, gives it a low ranking by search engines such as Google, where the site does not pop up on a search for "free credit reports" until the fourth page of links.

Consumers in states where the reports are already available have complained about advertising pop-ups for paid services with the three agencies. The law allows Experian, TransUnion and Equifax to advertise for other services on their sites.

More confusion

Also confusing: The free reports do not include the consumer's actual credit score. That's the all-important number that affects virtually every facet of everyday consumer life, from obtaining good insurance and mortgage rates to getting car loans and accessing additional credit.

The score can be purchased for a fee of $5 to $7, depending on the agency.

The first day of the roll-out was cumbersome in other states. "They got tied down on the Internet connection. Lines were busy, busy," Garcia said.

Ordering the reports by phone isn't much easier than navigating the Web site.

"You're never going to speak to a live person, everything is automated and it's rather frustrating. We encourage people to keep trying," Garcia said.

"It's probably best to do this when you're at home, and you have access to your files and your paperwork," Garcia said. "I would set aside a good 15 to 20 minutes. It's not lickety-split."

Consumers can get one credit report per year from each of the three agencies, which can be obtained simultaneously for comparison purposes, or staggered to keep an eye out for identity theft.

May want all three

"It sort of depends on where you are with knowledge of your credit reports. If you haven't looked at this ever, it might be a good idea to get all three," Garcia said.

Consumer advocates also worry that scammers might use the new report system to contact consumers.

"No one will ever solicit a consumer to obtain their free credit report. If you get something in your e-mail box saying We'll get you a free credit report,' forget it. If you get a call saying We'll get you a free credit report,' forget it," Garcia said.

Be wary of scams

"Never give information to a source when you did not initiate the contact," said Kurt R. Bauer, president of the Wisconsin Bankers Association.

Hassles aside, financial advisers still highly recommend getting the reports to watch for errors and possible identity theft.

"I want to be first in line. I think it's very important," Abrams said. "Twenty-five percent of credit reports include errors."

Consumers should review their financial information on a regular basis, according to Bauer.

Getting a copy of your credit report is one of the biggest safeguards," Bauer said.

What to do when you get your credit report

Look for missing information. Maybe the report lists a loan that you have paid off, but the lender has not yet informed the credit agencies.

Look for untrue information. The report might indicate you have paid bills late that you really paid on time.

Look for mix-ups. It doesn't happen often, but sometimes the accounts of a deadbeat consumer with a similar name are inadvertently included on your report, unfairly dragging down your credit score.

When you find errors:

Notify each of the credit reporting companies of each error, which will require them to investigate.

If the investigation results in the information being removed, you can request that the credit reporting companies notify anybody who recently obtained your report about the change.

You can place a written statement in your report if you dispute the findings of an investigation.

Michael Anderson writes for http://www.goodcreditreport.info where you can find out more about good credit reports and other topics.

About the Author

Michael Anderson writes for http://www.goodcreditreport.info where you can find out more about good credit reports and other topics.

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