The FACT facts

While searching the Internet for credit information, it is very common to find references to something called “the FACT act”. However, not everyone who sees this term recognizes it. This short article will give you some valuable information that will help you familiarize with this term and understand what it’s all about.

What is the FACT Act?

The word FACT stands for Fair and Accurate Credit Transaction. The FACT Act, or FACTA, is basically a set of regulations that were added to the FCRA (Fair Credit Reporting Act). These “new” regulations are focused into helping people prevent, detect and fight an increasingly common type of fraud known as Identity Theft.

More specifically speaking, the FACT act establishes new limits to the amount of personal information that the credit agencies are allowed to share with creditors that request data about a customer. It also sets new requirements regarding privacy of the information, as well as the acceptable levels of data accuracy.

Perhaps the most “visible” effect of the FACTA is that consumers are now entitled to receive an annual credit report from each one of the three credit agencies (Equifax, Experian and TransUnion) completely free.

When did the FACT Act become effective?

The FACT act was signed by the US President on 2003. As with any law, there may be certain modifications or new regulations that could improve its effectiveness and that become evident when the law is in use. These changes are adopted or rejected according to public comment, and thus the law becomes more useful.

The FACTA was added new regulations in 2004 and in 2005, and it is continuously improved.

How does the FACT Act protect me?

The main purpose of the FACTA is to protect people from identity theft, the most rapidly growing crime in the United States. The Federal Trade Commission reported that 10 million people were victims of identity theft in the year 2002, and that number has been increasing since then. The Federal Trade Commission web site is available in http://www.ftc.gov.

The FACT Act encourages credit self-monitoring as a powerful weapon against identity theft. For this reason, the FACTA gives consumers the right to request an annual report of their credit completely free, to each one of the three national Credit Bureaus.

How do I contact the three agencies to request my free annual credit report?

Actually, the request of your free annual credit report is not made by contacting each company and asking for it; instead, a dedicated web site has been set up. This site is located in http://annualcreditreport.com.

In addition (and not required by the FACTA), all three companies offer credit and credit score monitoring services on their own websites. This is a non-free but useful way to keep track of your credit history and request reports as often as you like. The three agencies’ web sites are located in http://www.freecreditreport.com, http://www.equifax.com, and http://www.truecredit.com (Experian, Equifax and TransUnion sites, respectively). Or, more conveniently, you can check out our Credit Report Monitoring Services review page and find out more about what credit monitoring alternatives are available from each one of the “Big Three” bureaus.

Jack Bronstein
Credit Report Watcher Team