A credit report is your personal financial summary that is seen by banks, credit unions, and mortgage brokers when you apply for a loan. Protecting the information on this report and ensuring its accuracy is one of the big concerns consumers have today.

A new federal law, the Fair and Accurate Transaction Act (or FACT), helps consumers understand their credit rights, understand their credit reports, and fights identity theft.

Its a good idea to check your credit report periodically to check for inaccuracies, or potential fraud. Otherwise, you may not be aware of errors until you apply for credit and receive a less than optimum rate or are turned down altogether.

This law entitles you to receive a free credit report from each of the three agencies each year. Log-on to www.annualcreditreport.com, or call toll free 877-322-8228.  Written requests can be sent to Annual Credit Report Request Service, P. O. Box 105281, Atlanta, GA 30348-5281. Do not go to any other so-called "free" sites. Annual Credit Report.com is the ONLY one approved by the government.

(To reach the site type www.annualcreditreport.com directly into your browser's url line.)

Once you receive your report, check account information and payment history. If you note any errors, contact the creditor directly. Go through your open lines of credit and close any that you are not likely to use.

FACT Helps Fight ID Theft

The FACT Act also provides consumers with new national identity theft protections.

If you suspect that you are or may become a victim of fraud, you can request an initial fraud alert be place in your file and provide that alert along with any credit score generated using your file. The credit reporting agencies must use reasonable procedures to ensure that the request for a loan or credit is by you, the true consumer, not an identity thief posing as you. This alert will stay in your file for 90 days.

If you are already a victim of identity theft, you can file an extended alert that offers more protection. Extended alerts stay on your file for seven years, and creditors are required to call or contact you before authorizing new credit accounts. The credit reporting agency must exclude you from any consumer lists it prepares and gives to any third party offer of credit or insurance.

The law will also enable active duty military personnel to place special alerts on their files when they are deployed overseas. This alert is good for 12 months.

The FACT Act also helps prevent identity theft before it occurs:

• Merchants are now required to leave all but the five last digits off store receipts, including the cards expiration date. This way, slips of paper that many people throw away and may fall into the wrong hands, do not contain personal credit information.
• If a financial institution receives a request for an additional credit or debit card shortly after an address change, it will have to contact the cardholder at the former address to make sure there isnt fraudulent activity.

Understanding Your Credit Report

The FACT Act addresses your rights as a consumer to have better information about the contents and use of your credit report.

• Creditors will have to notify consumers about reporting late payments before or within 30 days after reporting the negative information.
• Consumers will receive better information about the ability to opt out of pre-screened mailings.
• Mortgage lenders that use credit scores will have to provide applicants with the credit score information.