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TRW Adopts a New Credit Report Format That Meets With Approval : Data: Its Orange division now translates the formerly confounding documents into plain, reader-friendly language.


ORANGE — A few months ago, if you requested your credit history from TRW, what you got read something like this: "Hillside Bank; AUT; 3149999; NNNC21CCNN. . . ," followed by a few more eye-blurring codes.

Today, the same item would read: "Hillside Bank. This auto loan was opened 3/92 and has 48-month repayment terms. . . . As of 12/92, this account is current, and all payments have been paid on time."

Nudged by a lawsuit, TRW Inc. has translated its formerly confounding credit reports into plain language. Earlier this year, the Cleveland company's Orange-based credit data division introduced a straightforward format that doesn't require a pamphlet of small-printed directions to decipher multi-digit numbers.

The improved credit reports answer a consumer outcry that culminated two years ago in a lawsuit brought against TRW by the Federal Trade Commission and 19 states, including California. TRW settled the claim in December, 1991, by agreeing to respond more quickly to complaints and provide consumers with clear and accurate information.

The company said changes, however, were underway before the legal action. "We have gone many steps further in developing a clearer report than what was mandated," TRW spokeswoman Janis Lamar said. "The consent decree did not say, for example, that you had to remove all codes and write full sentences."

Susan Henrichsen, a California deputy attorney general involved in the suit, said she is satisfied with TRW's reader-friendly credit report. "I don't think you'll ever come up with a form everyone will understand perfectly," she said. "But TRW has put a lot of effort toward making significant improvements."

The original format, implemented in 1978, will still be used by TRW's customers--banks, credit unions, retailers and other businesses that make loans. "It's a lot quicker for them to read a list of codes than to read these paragraphs," Lamar said.

In the past, the clients' employees--who, with the aid of computers, are skilled at making sense of industry jargon--were just about the only people who ever saw credit reports. "To be honest, our focus on the consumer was not as heightened as it is today," Lamar said. "And I would take that further and say consumers weren't as interested in their credit reports as they are now."

Norm Magnuson, spokesman for Associated Credit Bureaus in Washington--the trade association for the credit reporting industry--said that a decade ago consumers rarely looked into their credit history.

"They applied for a credit card, and they either got it or they were turned down," he said. "Then the economy turned south, and lenders tightened their standards. People who had never been denied credit before were being rejected. So consumers became increasingly interested in reviewing their credit reports."

Magnuson said that TRW's two major competitors, Equifax in Atlanta and Trans Union Corp. in Chicago, are also revising their formats.

As another new feature, TRW now encloses a dispute form with the credit report so that consumers can easily notify the company about information they think is inaccurate.

Michelle Meier, counsel for government affairs at the advocacy group Consumers Union in Washington, praised TRW's demystification of credit reports.

"Eliminating the coding makes the reports significantly easier to read," Meier said. "The hieroglyphics deterred most consumers from even attempting to understand their credit reports, so this is a threshold step toward catching errors and minimizing future mistakes."

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