by Bradley Parsons
Staff Writer
When the calendar turned to June, Jacksonville consumers were given the opportunity to view their credit reports for free.
June 1 marked the local arrival of provisions under the federal Fair and Accurate Credit Transactions Act that give consumers free access to credit information gathered by the major credit rating agencies. The free reports were phased in regionally, starting Dec. 1 in the western states and reaching the northeast in September.
Companies like Equifax, TransUnion and Experian make their living gathering credit data on consumers then selling that data to credit providers, landlords, employers, etc. Consumers have always had access to the information, but until FACTA arrived, the credit reports were available only for a fee. TransUnion charges $29.95 to view an individual credit history, report and score.
For information on how to access the reports, go to www.AnnualCreditReport.com. Each consumer is allowed one free look at their report each year. Consumers are also entitled to view their report for free within 60 days of being denied a loan or credit line.
The agencies have figured out how to attach a few strings to the free reports however. At Experian, customers must enroll in a credit manager program, costing $9.95 per month, to view their report. All three agencies still charge to disclose a customer’s credit score. That’s the number that corresponds to a consumer’s credit worthiness. Access to the score typically costs about $10.
April Charney, a consumer law attorney at Jacksonville Area Legal Aid, said the free information is helpful, but said viewing credit reports should only serve as a first step to credit awareness.
Even the credit scores provide only a partial picture, said Charney. That’s because creditors request different types of information from the rating agencies. The score the agencies provide to lenders might be different from the score presented to consumers seeking their own information.
“The term ‘credit score’ is already losing its meaning,” said Charney. “It’s like saying affordable housing. What’s affordable to one person might look like a mansion to somebody else.
“It’s the same thing here. A credit score isn’t a composite that’s applicable across the board. It’s not your credit grade.”
While Charney sees the free access as a positive step, she said consumers are still a long way from receiving fair treatment from the rating agencies and lenders. Firms like Equifax and TransUnion aren’t liable if the information they provide is used incorrectly or even illegally. The burden to clean up the mess caused by identity theft usually falls on the consumer victim.
And there’s a down side to credit information becoming more accessible. As credit reports become easier to get, Charney fears the information will be used in transactions beyond lending. It’s a trend that’s already in motion.
“People don’t know that your credit score is largely determinative of your auto insurance rates,” said Charney. “If you have someone with a low credit score living in your home with access to your car, your rates are going to be higher. Their bad credit essentially pollutes your credit.”
Charney noted that landlords often ask for credit checks when making decisions on tenants. With credit information becoming more widely available, a person’s credit score will likely have greater implications than what interest rate will be charged on a loan.