With the New Year, consumers are reminded to take the time to review their overall financial health by requesting a free credit report.
An annual review of a credit report is essential to verify all outstanding debts and helpful in maintaining a strong protection against identity theft. Supporting the value of reviewing credit reports annually, the Fair and Accurate Credit Transactions Act was enacted by the US Federal Government in 2003. This act entitles consumers to receive a free copy of their credit report every year, from each of the 3 nationwide consumer credit reporting companies.
An annual credit report is also crucial in order to combat the potential complications when communicating with a debt collection agency. BBB reports that approximately 500 consumers nationwide have filed complaints about debt collection agencies this year. Debt collection was noted as one of the top scams for BBB | Greater Maryland in 2010. Without a recent credit report to verify all outstanding debts and lenders, consumers are more susceptible to confusion about unpaid debts and are at risk to fall for threats from phony debt collectors.
To illustrate the risk of fraudulent collection agencies, Marylanders reported to BBB aggressive and threatening collection phone calls related to past due “pay day loans” from CashNet. The consumers all had taken out pay day loans via internet years ago and believed the loans to be paid in full, but the phone calls persisted demanding payment. It is assumed the client list for this pay day lender was either sold or hacked and the scam artists were making efforts to collect on phantom debt – an industry purported to generate millions of dollars for skillful and persistent scam artists.
To stay on top of your financial health and avoid confusion about unpaid debts, BBB urges all consumers to take advantage of the opportunity to review a free credit report this year. Here are five tips to use in preparation of requesting your report:
1. Visit AnnualCreditReport.com , the only FTC authorized source for free annual credit reports under federal law.
2. Expect to be given an opportunity to view free credit reports from each of the three credit reporting agencies: Experian, Transunion, and Equifax. Order only report from one agency, then four months later, order a report from the next agency, and so-on, therefore monitoring your credit year round.
3. Be cautious of advertisements offering credit report monitoring trial periods.
4. Review the difference between a credit report and a credit score.
5. Beware of pop-up ads and unsolicited spam offers for credit reports.