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A copy of a credit report and federal rules about credit reports.

As of March 1, 2005, Minnesotans can request a free credit report annually from each of the nation's three credit reporting agencies.

Are you credit worthy?

By Sara Croymans

From eNews, July 21, 2005

A credit report contains information on where you live, how you pay bills, and whether you've been sued, arrested, or have filed for bankruptcy. It's compiled by consumer reporting agencies from financial institutions, public records, and other sources, and then sold to creditors, insurers, employers, and other businesses that use it to evaluate your application for credit, insurance, employment, or renting an apartment. According to the National Association of Federal Credit Unions, these agencies currently maintain credit files on more than 180 million adults in the United States and track more than 2 billion consumer transactions per month.

As of March 1, 2005, Minnesotans and other consumers in the midwestern states can request a free credit report annually from each of the nation's three credit reporting agencies, thanks to an amendment to the federal Fair Credit Reporting Act in late 2003. The companies are Equifax, Experian, and Trans Union. In the past, these agencies have charged up to $9 for a credit report.

(The opportunity to request free credit reports is being phased in throughout the country over a nine-month period that began last year. Consumers in the western states have been able to order their free reports since December 1; those in the southern states could submit requests beginning June 1, 2005; and consumers in the eastern states, including the District of Columbia, Puerto Rico, and all U.S. territories, can ask for their free reports starting September 1, 2005.)

Some tips to maintain or improve your credit score

* Pay all your bills on time.

* If you've missed a payment, get the payment current and then keep it current.

* Keep the balances owed on your credit cards and other lines of credit as low as possible.

* Pay off debt rather than move it around to other credit card or loan agencies.

Also, keep in mind that

* Simply closing an account does not make it go away, especially if it has a bad credit history.

* Paying off a collection agency account or closing an account that you were delinquent on will not remove the history of the account from your credit report.

* If you are having trouble paying all your bills, contact your creditor to discuss options or see a credit counselor.

* Be wary of companies that claim to repair credit. According to the Federal Trade Commission, these companies (commonly called credit clinics) don't do anything for consumers that consumers cannot do for themselves at little or no cost.

When you request your free credit report, ask for your credit score, too. (There is a fee for the latter.) A credit score is a rating that helps a business or landlord predict how creditworthy you are. In other words, how likely it is that you will repay a loan and make the payments when due. This rating can impact whether or not you receive credit and what your interest rate will be. A high score could mean you would get the lowest interest rates and fees. Credit scores may range from 400 to 900, with the average being about 700.

You can order your free annual credit report online at or by calling 877-322-8228. Online requests should be available to you immediately. Phone orders are processed and mailed to you within 15 days.

To learn more about the Fair Credit Reporting Act, see the National Association of Federal Credit Unions Web site.

For information about credit scoring, see the Federal Trade Commission Web site.

Sara Croymans is an educator specializing in family resource management with the University of Minnesota Extension Service Regional Center in Morris, Minnesota.