Checking the Accuracy of Your Credit Report

Credit reports can have a big impact. They can be used to grant--or deny--you a mortgage, auto loan, credit cards, telephone service, insurance, even a new job.

Accordingly, it’s worthwhile to review your credit report and correct any errors.

Credit reports basically profile your history of handling credit. They contain your personal statistics, names of creditors and your payment record for credit cards, personal loans, mortgages and other borrowings. They also contain information about legal judgments, bankruptcies and other matters of public record.

Credit bureaus (the three biggest are TRW, TransUnion and CBI/Equifax, but there are hundreds of smaller ones) collect this information and supply it to banks, finance companies, potential employers, insurance firms, merchants and other subscribers upon request. With modern computer technology, such information can be transmitted in seconds anywhere in the country.

Such instantaneous access means that more and more people can look at your credit report and make judgments about your finances and character, says Elgie Holstein, director of the Bankcard Holders of America, a consumer group in Herndon, Va.

“Credit reports more than ever before can make or break the personal finances of individual consumers,” Holstein says.

Unfortunately, such reports can be abused. Among other things, Holstein and other consumer advocates are concerned about “prescreening” of credit reports, under which credit bureaus secretly review your credit report on behalf of marketers seeking targets for sales pitches.

Accordingly, three separate bills are under consideration in Congress that would curb abuses. One proposal would ban prescreening. Another would require that credit bureaus consider your side--not just the creditor’s side--when you dispute the accuracy of your report. Current law does not obligate credit bureaus to listen to the consumer’s side, Holstein says.

Another proposal would require retailers and other subscribers to establish procedures for assuring the accuracy of information provided to credit bureaus. Also proposed is a requirement that would allow you to get a free copy of your credit report once a year.

But any legislation may take at least a year or two before being passed--if passed at all. A House subcommittee held hearings last week on the issues, but no similar bill has been introduced in the Senate.

Meanwhile, it’s a good idea to periodically undertake a credit report check-up--particularly if you plan to apply for credit soon. Even if you pay your bills on time, inaccurate information could be used to deny you credit, Holstein says.

Here’s how to proceed:

* Order a copy of your credit report from at least one of the three main credit bureaus.

Whenever you are denied credit, you are entitled to see your credit file for free within 30 days of the denial. Otherwise, you can get it for a modest fee, usually between $5 and $15 (in California, the maximum that can legally be charged is $8, Holstein says).

Call the credit bureau for details on how to order. To locate major bureaus in your area, call a local bank or retailer and ask which ones they subscribe to, Holstein suggests.

Also, write Bankcard Holders of America for its directories of credit bureau offices and its brochure, “Understanding Credit Bureaus.” They’re available by sending $2 to: BHA Credit-Check-Kit, 560 Herndon Parkway, Suite 120, Herndon, Va. 22070.

* Know what to look for.

Look for: old bills listed as overdue that you’ve already paid; accounts such as credit cards, lines of credit or mortgages listed as open that in fact are closed; items that are unfamiliar to you, such as accounts at stores that you’ve never heard of, and inaccurate legal information, such as a judgment against you for an unpaid bill.

It’s possible that someone else’s information has been reported on your account, or someone could have gained illegal access to your credit file and opened an account in your name. Or information of a namesake may have mistakenly gotten into your report.

* Dispute in writing any items you believe to be inaccurate.

Write to the credit bureau, dispute the incorrect information and ask them to investigate. Provide any evidence--such as documents, payment stubs, or canceled checks--to support your case.

Credit bureaus are legally obligated to verify the accuracy of disputed information, usually within 30 days, Holstein says. If they cannot verify it, the information must be deleted. Credit bureaus must notify you of the results of their investigation.

You may need to contact other credit bureaus to get them to correct the information as well. Also, consider contacting retailers, banks and other sources of incorrect information and insist that they correct bogus data.

CREDIT BUREAUS

Here are addresses and phone numbers of Los Angeles-area offices of the three major credit bureaus.

* TRW, P.O. Box 5450, Orange, Calif. 92613-5450. (714) 991-5100.

* TransUnion, P.O. Box 3110, Fullerton, Calif. 92634. (714) 738-4956.

* CBI/Equifax, 130 S. State College Blvd., Suite 100, Brea, Calif. 92621. (714) 255-5641.