Free Credit Reports Not So Free

As lenders look for borrowers with higher credit scores, consumers are becoming a lot more interested in finding out what their credit numbers are.

As lenders look for borrowers with higher credit scores, consumers are becoming a lot more interested in finding out what their credit numbers are. That, and a growing fear of identity theft, has led to a lot of advertising hype about “free” credit reports and scores. Many consumers are finding out, however, that “free” really isn’t free, with much of the confusion being generated because of the government’s requirements under the Fair Credit Reporting Act.

Under the terms of that law, the three national credit reporting agencies — Experian, Equifax, and Transunion – set up a website where you can request a free credit report once a year. The site also explains how you can ask for your free report by phone or by mail if you prefer. The confusion starts if you want your credit score – the magic number that lenders put such a high value on. The free credit report doesn’t include your credit score; to get it you’ll pay about $15 to each of the three agencies. Online and TV commercials touting free credit scores add to the confusion. Read the fine print and you’ll see that you’re actually signing up for a credit-monitoring program that costs you about $15 a month.

To get your free credit report, it’s best to access the official website from the Federal Trade Commission site. There are a number of sham sites posing as the official site in hopes of getting at your personal financial information. The FTC also cautions consumers about credit-repair scams that offer to fix up your credit history for a fee. A company that asks for money up front or promises to remove legitimate negative information from your credit report is almost always a scam.