WASHINGTON — Anyone who has bought a home or applied for a mortgage knows this hard financial reality: What is in your credit report can cost you thousands of dollars in extra loan charges, or it can save you thousands.

Lenders base their rate quotes to you on your credit score. Your credit score, in turn, is nothing more than your credit file run through an electronic risk-prediction grid.

If the information is erroneous, and your scores are depressed, that's your problem. You need to get the bad stuff in your files corrected or deleted before you apply for a mortgage.

But how are you supposed to know that somebody has botched up your credit files?

One remedy is to use your new federal right to obtain one free credit report every year from each of the three national credit bureaus. Signed into law by President Bush last December, the law is known as the Fair and Accurate Credit Transactions Act.

That sounds great. Like a free yearly visit to your doctor or dentist, federal law guarantees you a free credit checkup once a year from the big three bureaus: Equifax, Experian and TransUnion.

The free reports are not yet available to any of the 200 million-plus American consumers who have national credit files. But the Federal Trade Commission has just proposed the key details of how and where consumers will request their free reports, and when the program will start up.

Here's a quick update on the whole subject: Once it becomes operational later this year, there will be a single, as yet unnamed, organization that you'll be able to contact once every 12 months by e-mail, toll-free telephone number or regular mail.

You'll need to provide some personal identifying information — your Social Security number and name and address at a minimum — to get in the door. Then you'll be able to request your credit reports from all three national bureaus simultaneously. The bureaus will have 15 days to send you your reports, at no charge.

At the time you make your joint request, you'll be able to order your credit scores for yet-to-be-determined fees. Congress mandated the disclosure of scores to any consumer who asks for them, but it did not require that they be provided free of charge.

Under the new rules proposed by the FTC, the bureaus and their centralized credit-report organization also will be able to market other credit-related services to you — for example, automated credit-monitoring services that alert you to possible identity theft or sudden movements in your scores.

But the FTC won't allow the credit bureaus to include potentially confusing features on their joint credit report Web site such as "pop-up advertisements that limit (your) ability to complete an online request for an annual file disclosure." Nor will they be allowed to suggest or imply that you can't request your free credit report without buying some other product.

None of this, of course, will prevent you from ordering your credit files from any of the national bureaus anytime you choose, for the usual fees (typically about $9 per report online). Nor will it make it unnecessary for your mortgage loan officer to pull your credit files at the time of application and charge you for them.

But it will allow you to take a free look at something that governs your financial life, your insurance rates in many states and sometimes even your prospects for employment.

It will allow you to spot information that shouldn't be in your files (because it belongs to someone else with a similar name or nearly identical Social Security number). And it will give you a better shot at getting a better mortgage deal.

When does all this start? Unfortunately, not as soon as most consumers would probably prefer. Congress gave the FTC the authority to create a phased-in availability schedule to prevent the bureaus from being overwhelmed with requests. The FTC now proposes a West Coast to East Coast rollout beginning Dec. 1. Washington, Arizona, California, Colorado, Nevada and Oregon residents will get first crack at free reports on that date.

Next will come Midwestern residents (including Illinois, Michigan, Minnesota, Ohio, Wisconsin and Nebraska, among others) on March 1, 2005.

Southern states (including Florida, Texas, Georgia, Oklahoma, South Carolina and Tennessee) will become eligible June 1, 2005.

The Eastern states from North Carolina through Virginia, the District of Columbia, Maryland, Pennsylvania, New Jersey, New York and all of New England) will phase in Sept. 1, 2005.

That's not ideal for homebuyers and others who thought they'd get their first free credit reports last December. But it's better than no free reports at all.

Kenneth Harney: kharney@winstarmail.com