AZ residents entitled to free credit reports

JONATHAN J. HIGUERA

The Arizona Republic



Arizonans will be among the first consumers in the nation to be able to request free credit reports, starting tomorrow.

But they will still have to pay a modest fee to obtain their actual credit scores.

The free annual access to credit reports is mandated under the Fair and Accurate Credit Transactions Act, passed by Congress in late 2003. Arizona is among 13 Western states that are part of the first phase of the program, which will be available nationwide by Sept. 1, 2005.

However, Congress didn't require the three major credit reporting companies - Equifax, Experian and TransUnion - to make credit scores available free, although each company must offer them at a "fair and reasonable" fee. While that rate is still being determined, industry observers expect it to be between $4 and $8 per score. Currently, credit reports are typically sold for about $9 and credit scores about $5.

"When you think of how much your credit score could cost you over the life of a loan, it is absolutely worth getting it," said Norma García, a senior attorney with Consumers Union, a consumer advocacy group that pushed Congress to grant consumers access to the free credit reports and credit scores.

A consumer's credit score affects the interest rates he pays for a loan, including mortgages and car loans, insurance rates or even a job or housing eligibility.

"Your credit report is your financial résumé, and your credit score is a number derived from it," said Ed Mierzwinski, consumer advocate for U.S. PIRG, a Washington, D.C.-based umbrella group for state Public Interest Research Groups. "It is used in virtually every transaction. It's how insurance and credit card companies and others decide whether you are prime or subprime risk."

The new legislation, which amended the Fair Credit Reporting Act, also is supposed to give greater protections to consumers against identity theft and make it easier to resolve disputed negative credit marks.

One in 4 credit reports contains wrong information that could lead to credit denial, according to a study by U.S. PIRG released in June.



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