TRW Inc., facing intense criticism for embarrassing mistakes in its giant credit-reporting business, said Monday that it will offer consumers a free credit report once a year beginning in 1992.
The move by TRW will make it easier and cheaper for consumers to check for errors in their credit reports--which include details of an individual's financial history and are used to decide whether loans are granted. TRW said its decision to provide free reports to anyone who requests them by phone or mail is a sign that the company is becoming more consumer-oriented.
"We have concluded that by making consumer credit reports more widely available, the credit-reporting industry will improve its ability to maintain accurate records," said D. Van Skilling, executive vice president of TRW's information systems and services division in Orange. "This move is an important step in the evolution of the credit reporting industry."
The announcement followed TRW's admission Monday of another reporting problem. The company said it may have mistakenly included erroneous tax lien information for some residents of two New England states. TRW said the problems in Vermont and New Hampshire were unrelated to the decision to offer the free credit reports.
Consumer advocates praised TRW's action, which comes as Congress is reviewing several bills that would require credit bureaus to provide free reports to consumers. The nation's other two major credit-reporting services, Equifax Inc. and Trans Union Corp., said they had no immediate plans to follow TRW's move.
TRW sells about 300,000 credit reports annually to consumers, who pay $8 per copy in California and $15 in most other states to find out whether their financial histories are accurate and complete.
TRW was sued by the attorneys general in 13 states earlier this year for allegedly shoddy practices that included mixing up information among the 170 million Americans in its database and failing to properly monitor the accuracy of its files.
TRW, Equifax and Trans Union, which together control about 90% of the industry, have opposed moves in Congress to require them to supply free credit reports to consumers. Under current law, consumers are entitled to free reports only if they have been rejected for credit.
