2. To encourage consumers to apply for their free credit reports each year from each of the Na onal Credit Repor ng

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1 Credit Reports: A Financial Management Monitoring Tool Grady County OHCE Leader Lesson Leader s Guide January, 2013 Prepared by: Susan Routh, Extension Educator, Family and Consumer Sciences/4 H Youth Development Dear Leader: This lesson includes the following support materials: 1. Leader s Guide 2. Member s Guide 3. Credit Report Applica on 4. Credit Report Example (op onal handout) Objec ves: 1. To provide informa on about the Fair Credit Repor ng Act. 2. To encourage consumers to apply for their free credit reports each year from each of the Na onal Credit Repor ng Companies. 3. To encourage consumers to monitor their credit reports on an annual basis to prevent iden ty the. As you prepare for the lesson, please review this Guide and the Member s Guide. There is a note in the Leader s Guide when to distribute the Credit Report Applica on to members. One of the objec ves of the lesson is to encourage members to apply for their credit report from each of the na onal credit repor ng agency. The Example Credit Report is an op onal handout for your group. This lesson is designed to be a 20 minute presenta on with a 5 minute Ques on and Answer Session. For addi onal informa on, please refer to the Federal Trade Commissions website or your County Extension Office. Introduc on Consumers have had access to free credit reports once a year from each of the three credit repor ng agency since 2005, but how many take advantage of this right? Why should a consumer be interested in monitoring their credit reports? How are credit reports used today? With the increase in iden ty the and the use of technology to monitor credit, we, as consumers, should be highly interested in this topic. Our financial success is dependent on it. It is es mated that a person who has bad credit will spend $250,000 in their life me on Reports from the three credit repor ng companies contain similar informa on; all three are forma ed differently. 1

2 fees and interest which is more than someone who is said to have good credit. Managing credit and credit reports is important to avoid extra costs associated with borrowing money. What is a Credit Report? (Leaders Distribute Example Credit Report at this point) A credit report includes informa on on where you live, how you pay your bills, and whether you ve been sued or arrested, or have filed for bankruptcy. Na onwide consumer repor ng companies sell the informa on in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applica ons for credit, insurance, employment, or ren ng a home. Having an accurate, up to date report may affect the fees and interest associated with the cost of a loan. Or, the informa on in the report may affect whether or not an individual is hired for a posi on or given the opportunity to lease a home or apartment. Who are the Na onwide Consumer Repor ng Companies? The three credit repor ng companies are Equifax, Experian, and TransUnion. Creditors and business have the op on to report to one or all of them. They are privately owned companies who profit from handling consumer credit informa on. The Fair Credit Repor ng Act The Fair Credit Repor ng Act (FCRA) requires each of the na onwide consumer repor ng companies Equifax, Experian, and TransUnion to provide you with a free copy of your credit report, at your request, once every 12 months. The FCRA promotes the accuracy and privacy of informa on in the files of the na on s consumer repor ng companies. The Federal Trade Commission (FTC), the na on s consumer protec on agency, enforces the FCRA with respect to consumer repor ng companies. How do I order a free credit report? (Leaders Distribute Credit Report Applica ons during this segment) The three na onwide consumer repor ng companies have set up a central website, a toll free telephone number, and a mailing address through which you can order your free annual report. To order, visit annualcreditreport.com, call Or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box , Atlanta, GA Do not contact the three na onwide consumer repor ng companies individually. They are providing free annual credit reports only through annualcreditreport.com, or mailing to Annual Credit Report Request Service. You may order your reports from each of the three na onwide consumer repor ng companies at the same me, or you can order your report from each of the companies one at a me. The law allows you to order one free copy of your report from each of the na onwide consumer repor ng companies every 12 months. It is recommended that you alternate ordering the reports by using the following schedule: January Experian May TransUnion September Equifax A consumer can vary which company from which the report is ordered as long as only one report is ordered per company during the year. A Warning About Imposter Websites Only one website is authorized to fill orders for the free annual credit report you are en tled to under law annualcreditreport.com. Consumers can complete three credit report applica ons and seal in an addressed envelope at the beginning of a New Year to insure that they will request reports throughout the year to help monitor their credit report. 2

3 Other websites that claim to offer free credit reports, free credit scores, or free credit monitoring are not part of the legally mandated free annual credit report program. In some cases, the free product comes with strings a ached. For example, some sites sign you up for a supposedly free service that converts to one you have to pay for a er a trial period. If you don t cancel during the trial period, you may be unwi ngly agreeing to let the company start charging fees to your credit card. Some imposter sites use terms like free report in their names; others have URLs that purposely misspell annualcreditreport.com in the hope that you will mistype the name of the official site. Some of these imposter sites direct you to other sites that try to sell you something or collect your personal informa on. Annualcreditreport.com and the na onwide consumer repor ng companies will not send you an asking for your personal informa on. If you get an , see a pop up ad, or get a phone call from someone claiming to be from annualcreditreport.com or any of the three na onwide consumer repor ng companies, do not reply or click on any link in the message. It s probably a scam. Forward any such to the FTC at spam@uce.gov. What informa on do I need to provide to get my free report? You need to provide your name, address, Social Security number, and date of birth. If you have moved in the last two years, you may have to provide your previous address. To maintain the security of your file, each na onwide consumer repor ng company may ask you for some informa on that only you would know, like the amount of your monthly mortgage payment. Each company may ask you for different informa on because the informa on each has in your file may come from different sources. Why do I want a copy of my credit report? Your credit report has informa on that affects whether you can get a loan and how much you will have to pay to borrow money. You want a copy of your credit report to: make sure the informa on is accurate, complete, and up to date before you apply for a loan for a major purchase like a house or car, buy insurance, or apply for a job. help guard against iden ty the. That s when someone uses your personal informa on like your name, your Social Security number, or your credit card number to commit fraud. Iden ty thieves may use your informa on to open a new credit card account in your name. Then, when they don t pay the bills, the delinquent account is reported on your credit report. Inaccurate informa on like that could affect your ability to get credit, insurance, or even a job. What if I find errors either inaccuracies or incomplete informa on in my credit report? Under the FCRA, both the consumer repor ng company and the informa on provider (that is, the person, company, or organiza on that provides informa on about you to a consumer repor ng company) are responsible for correc ng inaccurate or incomplete informa on in your report. To take full advantage of your rights under this law, contact the consumer repor ng company and the informa on provider. Take the following steps : 1. Tell the consumer repor ng company, in wri ng, what informa on you think is inaccurate. 2. Tell the creditor or other informa on provider in wri ng that you dispute an item. 3

4 Consumer repor ng companies must inves gate the items in ques on usually within 30 days unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the organiza on that provided the informa on. A er the informa on provider receives no ce of a dispute from the consumer repor ng company, it must inves gate, review the relevant informa on, and report the results back to the consumer repor ng company. If the informa on provider finds the disputed informa on is inaccurate, it must no fy all three na onwide consumer repor ng companies so they can correct the informa on in your file. An Example Dispute Le er When the inves ga on is complete, the consumer repor ng company must give you the wri en results and a free copy of your report if the dispute results in a change. (This free report does not count as your annual free report under the FACT Act.) If an item is changed or deleted, the consumer repor ng company cannot put the disputed informa on back in your file unless the informa on provider verifies that it is accurate and complete. The consumer repor ng company also must send you wri en no ce that includes the name, address, and phone number of the informa on provider. Many providers specify an address for disputes. If the provider reports the item to a consumer repor ng company, it must include a no ce of your dispute. And if you are correct that is, if the informa on is found to be inaccurate the informa on provider may not report it again. What can I do if the consumer repor ng company or informa on provider won t correct the informa on I dispute? If an inves ga on doesn t resolve your dispute with the consumer repor ng company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the consumer repor ng company to provide your statement to anyone who received a copy of your report in the recent past. You can expect to pay a fee for this service. If you tell the informa on provider that you dispute an item, a no ce of your dispute must be included any me the informa on provider reports the item to a consumer repor ng company. How long can a consumer repor ng company report nega ve informa on? A consumer repor ng company can report most accurate nega ve informa on for seven years and bankruptcy informa on for 10 years. There is no me limit on repor ng informa on about crimi nal convic ons; informa on reported in response to your applica on for a job that pays more than $75,000 a year; and informa on reported because you ve applied for more than $150,000 worth of credit or life insurance. Informa on about a lawsuit or an unpaid judgment against you can be reported for seven years or un l the statute of limita ons runs out, which ever is longer. Can anyone else get a copy of my credit report? The FCRA specifies who can access your credit report. Creditors, insurers, employers, and other businesses that use the informa on in your report to evaluate your applica ons for credit, insurance, employment, or ren ng a home are among those that have a legal right to access your report. 4

5 A Note about Credit Counseling Services: When a family or individual is trying to overcome a debt issue, a credit counseling service can be a great tool. The Coopera ve Extension Service is a partner with the Consumer Credit Counseling Service (CCCS) of Central Oklahoma. Their website address is h p://cccsok.org/ and are available to discuss credit management. Non profit credit counseling services are available to consumers for no cost or low cost counseling depending on the credit issue and the individual or family s income level. While counseling is free, there is an administra ve costs. CCCS of Central Oklahoma strives to keep fees among some of the lowest in the na on. Monthly fees range from $10 to $35 and there is a one me set up fee of $ Many clients find that even with the fees, their monthly payments are s ll lower than the payments they were making on their own. There are no hidden fees and the first payment is the administra ve cost fee. They offer inperson, on line or telephone counseling. Their contact informa on is:(405) They are located at 3230 North Rockwell, Bethany, Oklahoma. References Consumer Credit Counseling Service of Oklahoma. (2012). h p://cccsok.org/services/dmp/ Web accessed Federal Trade Commission. (2012). Www. c.gov. Web accessed Osteen, S. (2008). Making Sense of Money Management. Unpublished Curriculum. Oklahoma State University. The information given herein is for educational purposes only. Reference to commercial products or trade names is made with the understanding that no discrimination is intended and no endorsement by the Cooperative Extension Service is implied. Oklahoma State University, in compliance with Title VI and VII of the Civil Rights Act of 1964, Execu ve Order as amended, Title IX of the Educa on Amendments of 1972, Americans with Disabili es Act of 1990, and other federal laws and regula ons, does not discriminate on the basis of race, color, na onal origin, sex, age, religion, disability, or status as a veteran in any of its policies, prac ces or procedures. This includes but is not limited to admissions, employment, financial aid, and educa onal services. Issued in furtherance of Coopera ve Extension work, acts of May 8 and June 30, 1914, in coopera on with the U.S. Department of Agriculture, Robert E. Whitson, Director of Oklahoma Coopera ve Extension Service, Oklahoma State University, S llwater, Oklahoma. This publica on is printed and issued by Oklahoma State University as authorized by the Dean of the Division of Agricultural Sciences and Natural Resources and has been prepared and distributed at a cost of 20 cents per copy NOTES 5