The new Fair and Accurate Credit Transactions Act (FACTA) does more than just give you new tools to fight identity theft (see cover article). This law also includes provisions that can help ensure the accuracy of your credit record, which can make a big difference the next time you apply for a loan, a job or some other benefit.

Your new rights to free credit reports: Your credit record, as prepared by a credit bureau, is a summary of your history of paying debts and other bills. The reports are used by banks, insurers, landlords and even potential employers to make judgments about your reliability. Most experts say you should check your credit report at least once a year from each of the three major credit bureaus — Equifax (800-685-1111, www.equifax.com); Experian (888-397-3742, www.experian.com) and TransUnion (800-888-4213, www.transunion.com).

One reason to stay on top of your credit report is to help spot identity theft. (See ID Theft: Strategies and Help for Fighting Back.) But another reason is to look for inaccuracies or omissions that could prevent you from getting the best possible credit terms. "It's especially beneficial to review your credit report before you are ready to apply for that dream house mortgage or the new car loan," said Janet Kincaid, FDIC Senior Consumer Affairs Officer.

For many years, the Fair Credit Reporting Act has given you the right to obtain free copies of your credit reports if you suspect that you are the victim of fraud, if you receive welfare assistance or are unemployed, or if you had recently been denied a loan or other benefit based on negative information in your report. A free annual credit report also has been available in some states. But otherwise, credit bureaus were permitted to charge for credit reports (up to $9 under the most recent federal rules). That's about to change.

Under FACTA, you will have the right to obtain one free copy of your credit report from each of the three major credit bureaus every 12 months. Rules issued by the Federal Trade Commission (FTC) provide for free credit reports to become available in stages, beginning in western states December 1, 2004, and gradually moving east with completion due by September 1, 2005. FACTA also requires the major credit bureaus to provide a single point of contact so you can request your reports from all three companies with one toll-free phone call, letter or Internet request. (See more details at www.ftc.gov/bcp/conline/pubs/credit/freereports).

Although you can ask to receive copies from all three credit bureaus at the same time, Consumer Reports magazine suggests spreading out your requests throughout the year to get periodic updates and maximize your protection. Specifically, the magazine recommends that you "request your report from one bureau initially, then follow up with another bureau's report four months later and the third four months after that."

Your right to obtain your credit score: Everyone with a credit record also has a credit score. It's a number calculated by a credit bureau, a lender or another company based on your credit report. A credit score is intended to help lenders and other users of credit reports make reasonable decisions as quickly and efficiently as possible. "Your credit score can be an important factor in getting a loan with an attractive interest rate or even obtaining an insurance policy at a low price," said Kincaid. "Knowing the factors used in deriving your score can help you understand what you need to do to improve your rating and get a better deal."

Prior to FACTA, some providers of credit scores voluntarily made them available to consumers. But starting December 1, 2004, you will have new rights to obtain your score from a credit bureau as well as an explanation of the key factors used in computing the score. (Note: If the credit bureau's score came from another company, it must tell you how to contact that firm to obtain the rating factors.)

As for cost, the credit bureau may charge you a "reasonable fee," which will be determined by the FTC. "However, if a mortgage lender uses a credit score in connection with your application for a certain type of home loan, you will be entitled to learn your score and some basic information about it for free," says David Lafleur, a Policy Analyst at the FDIC.

Which home loan applications qualify for the free credit score information under FACTA? "The loan application must relate to a home loan and it must be for specified consumer purposes," according to Lafleur. "For example, a loan to purchase or refinance a one- to four-family home will qualify, as will a home equity loan or line of credit for consumer purposes. A home equity loan to finance a small business won't."

To learn more about credit reports, credit scores and FACTA, go to the FTC's Web site (www.ftc.gov) or call toll-free 877-FTC-HELP (877-382 -4357). The FDIC and the other banking agencies listed on For More Information also have Web sites and staff that can answer your questions.