Brandon Hanson recently shared an experience which reminded me how even the very financially savvy can get burned by "free" credit reports:
"I hate credit checks - specifically, the 'say-it's-free-but-really-it's-not' kind. I went on to [a site] promising a free credit report to get, surprisingly enough, a free credit report. Although I'm usually aware enough to identify the catches, one must have slipped by, as a couple of months later I realized an errant recurring charge had been on my credit card statement starting from a month after I secured the credit report. Luckily, my wife peruses our statements for things like this…"
Three years ago the Fair Credit Reporting Act was amended to require each of the credit reporting companies (Equifax, Experian and TransUnion) to provide you with a free copy of your credit report every 12 months. Most people are aware that they can get free copies of their credit report, but there is often confusion over where to get it. A Google search will turn up hundreds of sites that offer free credit reports but nearly all of these come bundled with extras you must pay for. Some of these sites seem to use deceptive or confusing tactics as they provide you a "free" credit report bundled with options you may not want or need.
So, where you can you get your free credit report? The only authorized site to get your free credit report is AnnualCreditReport.com. After verifying your identity with AnnualCreditReport you have the option to select which nationwide consumer reporting companies you want a credit report from – Equifax, Experian and TransUnion. After that you are directed to each individual company which you have selected, where you verify your identity again.
According to Bankrate.com, "the FTC has required the agencies to make the process simple, uncluttered with advertisements and as minimally intrusive as possible." However, based on my own experience, you will be presented with several opportunities to purchase additional items including credit scores and credit monitoring. If you click through your options too fast, you may purchase some of these options and also accidentally sign up for unwanted monthly emails from the agencies. Here's a quick look at some of the offers you will receive even when ordering via the official free credit report website, AnnualCreditReport.com:
When you receive your free credit report, it does not include your credit score. TransUnion offers to sell you this credit score for "just $7.95." In fine print they also disclose, "Our Credit Score may not use the same credit scoring model used by a lender when making a lending decision." Typically, when someone talks about their credit score, they are talking about their FICO score. On another page TransUnion features, "VantageScore, the only credit score developed and used by all three national credit bureaus." As reported in a recent USA Today article, "TransUnion and the other bureaus are trying to wrest control of the credit-scoring market from Fair Isaac" by promoting their own credit scores. There can be a significant numeric difference between a FICO score and other credit scores offered by credit reporting agencies.
Experian offers to reveal your Experian Credit Score for only $5.95. Again, this is not your FICO score. Experian also offers Triple Advantage Credit Monitoring (the same credit monitoring package Brandon accidentally signed up for). To avoid the add-ons you have to click on the boring, grey "no thanks" button at the bottom of the page.
Unlike TransUnion and Experian, Equifax attempts to sell you your actual FICO score. The price is $7.95. They also attempt to sell credit monitoring for $7.95/month. Here, to avoid the add-ons, you click on the text link at the bottom of the page which reads, "No Thanks, I Don't Want To Know My Score."
With a better credit score, you will obtain a better rate on a P2P loan at Lending Club and more favorable credit everywhere else. That makes it very important to monitor, maintain, and fix your credit. The best place to start is with a free credit report through AnnualCreditReport.com. Many will also find value in ordering credit monitoring services and viewing their FICO scores. However, my caution is click carefully to avoid accidentally ordering these services if you don't want or need them.