Keep an Eye on the Money You Owe. (cover story)

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Author: Hannon, Kerry

POCKETBOOK: DON'T BE A FOOL WHEN IT COMES TO MANAGING YOUR MONEY

I bet a hundred bazillion dollars you didn't look at your credit report in 2005. And the odds are in my favor. More than half of Americans do not regularly review their report each year. And nearly 1 in 4 has never looked at it. But in '06, you have no excuses. Under the Fair and Accurate Credit Transactions Act, every citizen is entitled to a free annual copy from annualcreditreport.com. The service began rolling out last December and is now in every state. That's a savings of $9.50--the fee for a copy from the three credit reporting giants: Equifax, Experian, and TransUnion.

Keeping tabs on your credit report is the key to fiscal fitness. It covers every penny of your payment history. Banks, insurers, and landlords increasingly turn to the reports to check you out. So do potential employers.

What they find won't be the truth and nothing but the truth. Nearly 80 percent of credit reports contain mistakes--outdated data, paid-off loans listed as unpaid, money owed by relatives with a name like yours.

If you find an error, contact the credit bureau immediately (the address is on the report). By law, the credit bureau has 30 days to respond; it must correct or remove inaccurate info and, if you ask, send a revised copy to anyone who's pulled your report in the past six months.

If you're uneasy about submitting your Social Security number online, call (877) 322-8228. Order a report from one agency, then order from another in four months. That way, you can keep track of any changes in your history. And me, I'm requesting a copy just to make sure it doesn't say I made an imprudent bet with millions of U.S. News readers.

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By Kerry Hannon