Are Those Free Credit Reports Really Free?
With so many companies advertising free credit reports on national television, it's becoming increasingly hard to separate the wheat from the chaff. Because if the advertised offer is really free, then can the company justify paying for national advertising? And it's not like the campaigns ran and then stopped all of a sudden. They've been on the air for years now, so it has to be a profit-generating venture. And they all seem to be hell-bent on showing you what horrible things can happen to you should you not get your free credit report, while minimizing the fact that they're just as intent on selling you something.
Common sense tells us that if the ads keep airing, it's because the campaigns are successful in reeling in new customers. At the same time, almost everyone knows that there's no such thing as a free lunch and that "free" is often a bait that scammers use to lure in unsuspecting victims. In that regard, it's relevant to wonder if those offers are really free? Free as in no monetary exchange whatsoever.
The short version of the answers to these questions would simply be "No, they are typically not free", and "Yes, they mostly come with strings attached". If you're the type of person who like more detailed answers, then feel free to read on. A more detailed answer would be that just about any offer you see advertised on TV is NOT free, and so are most of the offers you see online. There are free offers, though, and we can help you sort out the free variety from the paid variety.
By now you can probably tell that most of these free credit reports offers have a cost. Most of the major banks and lending firms offer "free credit reports" that are really subscription services (which offer anytime access to your report) offered either by them or by one of the major credit bureaus that they have a partnership with. Those three credit bureaus are Equifax, Experian, and Transunion. While there are more than three credit bureaus, those three are the ones that count and which all companies get their information from and report to.
Another reason for the rise in free credit report offers is that people have been getting more concerned about the content of their credit reports, because of the rise of "identity theft". Consequently, a lot of companies have entered the so-called "identity protection business". Their business model is simple: they advertise a free credit report, but in the fine print of their offer, should you accept it, it says that you're agreeing to subscribe to their credit monitoring services. They typically charge from $6.95 to $19.95 a month, and upon sign up you enroll for a plan that lasts anywhere from 3 months to a year. For your money, you get alerted in the case of suspicious activity on your account, and get notified about credit inquiries and late payments.
With the enactment of the Fair Credit Reporting Act (FCRA), the "big three" credit bureaus are each required by law to offer their customers a free credit report every year. They're not required to send it to you, though, so you have to actually ask for it. You can do so by mail, by phone, or over the Internet. Be sure you follow the instructions so you can get your free credit report, the one where you really don't have to pay a dime.
Also, by federal law, you're entitled to a free credit report if a company denies your credit, insurance or employment application based on information in that report. In this case, you must request your report within 60 days of such an occurrence. If you're unemployed (and planning to look for a job within 60 days), you'll be glad to know that you're also entitled to a free credit report each year. The same holds true if you are on welfare or if you believe your report is inaccurate due to fraud, including identity theft.
When it comes to competition, few industries push it to the level that banks do. Keeping current customers from going to the competitor and/or bringing them in from the competition requires ever-improving offers. That has prompted many banks to offer stripped-down versions of credit monitoring services as part of their services, as a reward for doing business with them. The terms vary but usually all you have to do is get approved for their credit card or open some type of account with them and you're good to go. Similarly, the companies that serve the high-end market (like, for example, American Express) also strive to offer their customers a complete suite of financial services, which almost always includes credit report access and monitoring.
There is no reason to pay for any service if all you need to do is look at your credit report every now and then to make sure that your information is correct. For this you can either get all three credit reports for comparison purposes, or space them 4 months apart for continuous monitoring and prevention of identity theft. Should you want to watch your credit more closely, there are plenty of companies out there that offer these services as part of their package of services, avoiding you the extra cost you'd have to incur by going with a dedicated service.
Because so many life-changing decisions hang on the status of your credit report, it is essential that your credit report be accurate and that you take the necessary steps so that it remains that way. Monitoring services will only alert you, they won't do the legwork to correct anything that might go wrong. It's your responsibility to ensure that your credit report contains no errors, and you can do that without having to pay for it.
Common sense tells us that if the ads keep airing, it's because the campaigns are successful in reeling in new customers. At the same time, almost everyone knows that there's no such thing as a free lunch and that "free" is often a bait that scammers use to lure in unsuspecting victims. In that regard, it's relevant to wonder if those offers are really free? Free as in no monetary exchange whatsoever.
The short version of the answers to these questions would simply be "No, they are typically not free", and "Yes, they mostly come with strings attached". If you're the type of person who like more detailed answers, then feel free to read on. A more detailed answer would be that just about any offer you see advertised on TV is NOT free, and so are most of the offers you see online. There are free offers, though, and we can help you sort out the free variety from the paid variety.
By now you can probably tell that most of these free credit reports offers have a cost. Most of the major banks and lending firms offer "free credit reports" that are really subscription services (which offer anytime access to your report) offered either by them or by one of the major credit bureaus that they have a partnership with. Those three credit bureaus are Equifax, Experian, and Transunion. While there are more than three credit bureaus, those three are the ones that count and which all companies get their information from and report to.
Another reason for the rise in free credit report offers is that people have been getting more concerned about the content of their credit reports, because of the rise of "identity theft". Consequently, a lot of companies have entered the so-called "identity protection business". Their business model is simple: they advertise a free credit report, but in the fine print of their offer, should you accept it, it says that you're agreeing to subscribe to their credit monitoring services. They typically charge from $6.95 to $19.95 a month, and upon sign up you enroll for a plan that lasts anywhere from 3 months to a year. For your money, you get alerted in the case of suspicious activity on your account, and get notified about credit inquiries and late payments.
With the enactment of the Fair Credit Reporting Act (FCRA), the "big three" credit bureaus are each required by law to offer their customers a free credit report every year. They're not required to send it to you, though, so you have to actually ask for it. You can do so by mail, by phone, or over the Internet. Be sure you follow the instructions so you can get your free credit report, the one where you really don't have to pay a dime.
Also, by federal law, you're entitled to a free credit report if a company denies your credit, insurance or employment application based on information in that report. In this case, you must request your report within 60 days of such an occurrence. If you're unemployed (and planning to look for a job within 60 days), you'll be glad to know that you're also entitled to a free credit report each year. The same holds true if you are on welfare or if you believe your report is inaccurate due to fraud, including identity theft.
When it comes to competition, few industries push it to the level that banks do. Keeping current customers from going to the competitor and/or bringing them in from the competition requires ever-improving offers. That has prompted many banks to offer stripped-down versions of credit monitoring services as part of their services, as a reward for doing business with them. The terms vary but usually all you have to do is get approved for their credit card or open some type of account with them and you're good to go. Similarly, the companies that serve the high-end market (like, for example, American Express) also strive to offer their customers a complete suite of financial services, which almost always includes credit report access and monitoring.
There is no reason to pay for any service if all you need to do is look at your credit report every now and then to make sure that your information is correct. For this you can either get all three credit reports for comparison purposes, or space them 4 months apart for continuous monitoring and prevention of identity theft. Should you want to watch your credit more closely, there are plenty of companies out there that offer these services as part of their package of services, avoiding you the extra cost you'd have to incur by going with a dedicated service.
Because so many life-changing decisions hang on the status of your credit report, it is essential that your credit report be accurate and that you take the necessary steps so that it remains that way. Monitoring services will only alert you, they won't do the legwork to correct anything that might go wrong. It's your responsibility to ensure that your credit report contains no errors, and you can do that without having to pay for it.
About the Author:
We have been advising people for years to get a no trial credit report, instead of paying for the service. For more of the same type of money-saving tips, visit our personal finance blog.
posted by Credit Counseling at
4:40 AM
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