Beginning September 1, federal law gives Vermont* residents the right to a free credit report from each credit bureau as well as a lesser known “CLUE” report. The industry, accustomed to selling these reports, has done little to inform consumers where to obtain these free reports.
Most consumers are unaware of the availability of free “CLUE” reports. “CLUE” stands for Comprehensive Loss Underwriting Exchange. A company named ChoicePoint collects and sells information about consumers’ insurance claims history, as well as employment and tenant history. The insurance portion of the report contains information about insurance claims by name and address. Incorrect information can result in denial of coverage or higher rates.
Although used since the 1980’s, consumers have only recently become aware of CLUE reports. Now the Fair and Accurate Credit Transactions Act (FACT Act) gives them the right to review their CLUE reports for free. The law also requires the industry to fix inaccurate entries. Some consumers report that simple inquiries to their insurance company are mistakenly reported as claims. Others say that CLUE entries have derailed home sales because insurers refuse to issue a policy required by the mortgage lender, therefore killing the deal.
Free CLUE reports are available online at www.choicetrust.com. Consumers can also request the report, or a mail-in form, by calling three separate numbers. The first is for insurance reports, 866-312-8076. The second is for employment history reports, 866-312-8075. The third is for tenant history reports, 877-448-5732.
The right to check credit reports is particularly timely since data thieves reportedly recently accessed at least 145,000 ChoicePoint reports. Consumers can now check if their files were involved.
A better known provision of the FACT Act is the right to free credit reports from credit reporting companies, the largest of which are Equifax, Experian and Trans Union.
Credit reporting companies maintain files on just about anyone who has applied for credit. Consumers who have never reviewed their credit report will be surprised to learn that every recent loan and payment is dutifully recorded. The credit bureau also records employers, monthly income, and in many cases, incorrect information such as accounts that do not belong to the consumer, or closed accounts listed as open.
A recent survey by US PIRG found that 79% of credit reports had errors and 25% had errors serious enough to result in the denial of credit.
Credit card companies are not the only ones who use credit reports. Landlords, insurance companies and employers access the information. Inaccurate or negative information can prevent consumers from obtaining a mortgage, justify a landlord’s refusal to rent an apartment and even stop a person from getting a security clearance or job offer. It is important that the information in the credit file is accurate.
Free credit reports from the three major credit bureaus are only available from a single entry point. Consumers can reach that site online at www.annualcreditreport.com. They can also order the reports by calling 877-322-8228 or by mailing in a form found on the website or on the back of a brochure available from the federal trade commission (www.ftc.gov or 877-382-4357 and navigate the menu until you can request the brochure from a real person).
Free credit reports are also available from a fourth credit bureau, Innovis, by calling 800-540-2505 or online at www.innovis.com. (Editor, for a sidebar on the “secret” fourth credit bureau, Innovis, visit www.rationalsimplicity.com/secret.html.)
Consumer advocate Tim Covell says the safest mode is ordering these reports is by mail. He additionally advises consumers to exercise their right to have their social security number and account numbers truncated on the printed reports so they will be less harmful if they fall into the wrong hands.
Covell notes these companies have done little to inform consumers of the availability of free reports or of their duty to correct errors. Searching the term “free credit report” on the Internet only turns up businesses that sell the credit reports. And the web sites of each of the major credit reporting agencies prominently sell credit reports and only mention the FACT Act in fine print.
“The FACT Act gives consumers a useful new tool to monitor and correct inaccurate information,” Covell says, “however, both the industry and the government should do more to educate consumers about their rights.”
For more information and hotlinks to the websites in this story, visit www.rationalsimplicity.com/clue.html.
*On September 1, 2005 residents of the following gain access to free annual credit reports: Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, Puerto Rico, and all U.S. Territories..
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Contact:Tim CovellPO Box 14358Albuquerque, NM 87191-4358505-883-4083http://www.rationalsimplicity.comEmail: [email protected]
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