The Fair and Accurate Credit Transactions Act, also known as the FACT Act, is a federal law designed to give consumers more control over their personal credit files. The passage of the FACT Act by Congress in 2003 was intended as an update to the Fair Credit Reporting Act (FCRA), which has been in place since the 1970s.
So, what does this mean for us? The FACT Act is the legislation that, among other things, allows consumers to request a free copy of their credit report from each of the three major credit bureaus once each year.
When it was signed into law by President George W. Bush in 2004, the FACT Act put in place a set of standards designed to improve the accuracy of consumers’ credit reports. It also included rules that help to prevent identity theft and allow consumers to place a fraud alert directly in their credit file.
Factact Free Disclosure is a Soft Inquiry on Your Report
Of all the provisions and consumer protections within the FACT Act, the one that is most frequently used is the free credit report available to all consumers once a year. Prior to the FACT Act, consumers were forced to pay for a copy of their credit report if they wanted to verify its accuracy.
Congress mandated free access to credit reports so that each of us would have the opportunity to check for inaccurate or erroneous entries. It also set forth the guidelines by which consumers could quickly and easily dispute these mistakes, and have them corrected or removed from the report.
The part of the FACT Act that allows consumers to request their free credit report was the establishment of the website annualcreditreport.com. The three major credit reporting companies — Equifax, Experian, and TransUnion — were required to create and maintain this website, which is the only official source for requesting your free report. While other websites might claim to offer free access to credit reports, only annualcreditreport.com is sanctioned by the government.
When you do request a free copy of your credit report through annualcreditreport.com, an entry is typically made in your credit file that will say: FACTACT FREE DISCLOSURE. This is a so-called soft inquiry on your report, and does not negatively impact your credit score or rating.
Since each of the three reporting agencies allows you to request your report from them one time each year, many people choose to request a copy from one of the companies every four months or so on a rotating basis. That way, you can keep an eye on your credit file throughout the year — all at no cost to you.
Why You Should Check Your Credit Reports Regularly
A regular review of your credit report is crucial if you want to maintain a high credit score. By checking your credit reports regularly, you are more likely to detect any errors showing up in your credit file, or worse, any fraudulent activity that may indicate identity theft. Be sure to compare any new entries on your report to what was there previously, and verify that all of the entries are actually yours.
If you do find errors or unauthorized use of your credit on your report, you may wonder what steps you should take. Fortunately, each of the credit reporting agencies allows for a dispute process to remove entries that don’t belong to you.
Equifax allows for disputes to be submitted online, by mail, or by calling a toll-free number. They also offer a way to check your dispute status online.Experian also lets you submit an online dispute, as well as offering submission over the phone or by mail. In addition, you can place a security freeze on your account if you suspect fraud or identity theft. Similarly, TransUnion offers an online tool to dispute errors, as well as by phone or through the mail.
By far the fastest way to submit a dispute and track your submission is through the online dispute tools.
Contact a Credit Repair Professional to Help with Disputes
If you find that you don’t have the time or lack the know-how to file a dispute, credit repair companies offer removal services to do this for you. There are many reputable credit repair services to help you submit disputes, and we’ve researched some of the best. So, consider your options, and request your free credit report. It’s the best way to ensure your credit score is as good as you deserve.