The new federal law that grants consumers free credit reports, also allows consumers free access to other credit, financial and personal records used by insurance companies, landlords, employers and others to determine your creditworthiness.

That lesser known provision of the new law also may be creating some confusion about which personal data gathering companies must open their records at no charge to the public.

Beginning Wednesday, Dec. 1, millions of consumers, first in the West, received free access to one free credit report, each year, from each of the Big Three credit reporting agencies -- Equifax, Experian and TransUnion.

Those reports are available on a new website (AnnualCreditReport.com), by phone and by mail.

Credit reports track credit consumers' payment records on individual credit accounts and reveal how well or how poorly each account is being paid. The reports also document credit requests and notices of liens, judgments and other "derogatory" remarks as well as remarks from the consumer, among other information.

A credit report can make or break a home purchase.

"Next to cash in the bank, a credit report is one of your most valuable assets. It will affect your financial life in many ways, including the rates you pay for loans and insurance, whether you get that cell phone you want, and in the not-too-distant future, what your electric bills and other bills cost," said Sarasota, FL's Gerri Detweiler, author of The Ultimate Credit Handbook (Plume, $15).

Six states had already provided one free credit report per year to their residents. They were: Colorado, Georgia, Maryland, Massachusetts, New Jersey and Vermont.

Nationwide, the new provision that allows free reports was available first in the West. Other regions will gain access to free reports over time in a year-long roll out scheduled to end in September 2005.

Otherwise, the reports previously were available and continue to be available for a fee or for free if you are denied credit, if you want to challenge an entry because of fraud, if you are unemployed or if you are on welfare.

The new free annual credit reports provisions comes with the Fair and Accurate Credit Transactions Act (FACTA), enacted Dec. 4, 2003 to amend the Fair Credit Reporting Act (FCRA).

Lesser known is that the final FACTA rendering in the federal register says consumers also have the right to one free report prepared by any "nationwide specialty consumer reporting agency."

Those agencies were already regulated by FCRA and defined as "a consumer reporting agency that compiles and maintains files on consumers relating to medical records or payments, residential or tenant history, check writing history, employment history, or insurance claims, on a nationwide basis."

The new rules say regulated specialty agencies need only provide a toll free number for consumers to call for a free copy of their report. While specialty data gathering agencies can list such a number on their website or elsewhere, creation of a website is not necessary, unlike the requirement for the three national credit reporting agencies.

The specialty agencies are not subject to the phased in national rollout provision and on Dec. 1 all those regulated by the federal government were to have free access to reports available to consumers.

In the early afternoon of Dec. 1, among some of the more well-known specialty consumer agencies:

• ChoicePoint's ChoiceTrust website (which includes a toll-free number) for consumers, was offering free "C.L.U.E" reports. C.L.U.E stands for Claims Loss Underwriting Exchange, and is a database that reports homeowners and auto insurance claims. ChoiceTrust was also offering consumers free annual pre-employment screening records and tenant-history reports, data it also collects.

• MIB Group, which provides life insurance companies with medical data, was offering, from it's website and toll-free number, free annual consumer access to its reports.

• The website of ChexSystems, a major check-clearing database, operated by eFunds Corp., clearly stated it is regulated by FCRA and other related federal rules. On Dec. 1, the site provided the required toll-free number, but information about free access to reports couldn't be found online. Using the online feature to obtain a copy of a report led you to a page that offered your report for free in six states and for fees ranging from $3 to $8 in other states. Calls to the toll-free number ended with the same request for fees but offered no mention of a free report.
  

  RealtyTimes.com has learned that ChexSystems missed the deadline because they were switching their website to a new server. A new website ConsumerDebit.Com, with a new toll-free number, was due at press time to go live.

"It's a challenge for the consumers to come across the sites in first place. Most people found out this market exists when there has been an adverse action. There may be some confusion and we'll be watching that," said Tena Friery, research director at Privacy Rights Clearinghouse in San Diego, CA.

There are numerous specialty agencies, said Friery, and making sure all those regulated by the federal government are in compliance with the new rules will take some time. The national phased in roll out was designed to give both the federal government and reporting agencies time to comply.

Complaints can be addressed to the Federal Trade Commission (FTC), which oversees administration of the law.

"This is kind of a tricky thing and there are a lot of companies in this kind of specialized market and there are a lot of gray areas. The FTC and consumer groups such as ours has some educating to do," Friery said.

In one "gray area," Santa Ana, CA-based First American Corporation recently began to develop non-traditional credit reporting and credit history verification services. With Fannie Mae and Freddie Mac approval, the company's non-traditional credit report begins with any available traditional credit bureau data supplemented with alternative credit sources such as rent payments, utility or insurance bills.

Supplemental credit information is verified by First American, which then generates a credit report that it says meets or exceeds industry and secondary market underwriting requirements.

The service is designed to give those with non-traditional credit histories a better shot at obtaining credit, especially to buy a home.

The company said on Dec. 1 it has no plans to make the report available for free to consumers.

"It is not a compliance issue. We may want to do it, but as of right now there isn't any indication it's something we'll have. For the most part, we are going to the lender with the information and there is no out of pocket paying for it by consumers," said David Schultz, a First American spokesman.

Published: December 2, 2004

Use of this article without permission is a violation of federal copyright laws.

Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.