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.
Since we see more and more companies jumping in the "get your free credit report" fray, and spending the corresponding advertising dollars, then it has to be a profitable venture. Yet a "free" product doesn't exactly generate profits, so there has to be some kind of exchange of funds going on in order to generate those profits. Viewed from this angle, it then becomes very interesting to wonder if those offers are really free? Or do they come with strings attached?
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.
Like we said previously, most of the credit report offers do carry a cost. Banks and other lending firms have been touting free credit reports for years now, but what they really are offering is a subscription service where you get to check your credit report any time you want. This service is managed either by them or is the result of a partnership with one of the three major credit bureaus, Equifax, Experian, and Transunion. There are more than 3 credit bureaus operating in the US, but those three are pretty much the only ones that count.
Because of the rise of identity theft, there has been a steep rise in the number of companies in the "identity protection" business. What they typically do is that they offer a "free" credit report, which is linked to a membership service. While the focus in the advertisements is on the free report, the fine print on most of these offers clearly states you are agreeing to subscribe to such a service, usually three months to a year at a time, that charges you a monthly fee. This fee, which can range from $6.95 to $19.95 per month, entitles you to a service that alerts you to suspicious activities, credit inquiries and late-payment notices on your account.
Because of the Fair Credit Reporting Act (FCRA), the "big three" credit bureaus are legally obligated to give anyone who asks for it one free credit report every year, which means that you're eligible for three free credit reports a year. Whether you request it online, by mail, or over the phone, be sure to follow the instructions given to you so that you can receive your free, no strings attached credit report.
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.
In case you didn't know it, there's a tremendous amount of competition in the banking industry. In order to keep customers or bring in new ones, banks constantly have to improve their offerings. So some banks have been offering a free credit report, and some form of basic online service that allows you to view and monitor your credit score, when you do business with them, either by getting a credit card issued by them or opening up a bank account with them. Highly desirable (and equally selective) credit cards issuers, such as American Express, also offer their best consumers very competitive packages of services, with credit report access and monitoring almost always being included at no extra cost.
Some people only use credit sparingly. They have no need for continuous monitoring of their credit reports or anything like that. If that's you, all you need to do is to ask one credit bureau for a credit report every 4 months, just so you can check that your accounts are accurate and that you haven't fallen victim to identity theft. If you need more than that basic level of monitoring, then you can turn to the companies that offer such services in their package deals so that you don't have to pay extra for it.
With so many aspects of your life being impacted by your credit report (credit, insurance, employment), there's no need to stress the importance of monitoring your credit report. Should you spot any errors, you should definitely take action as soon as possible to correct them. And there's no reason why you shouldn't be on top of this: odds are, you won't even have to pay to get your credit reports.
Since we see more and more companies jumping in the "get your free credit report" fray, and spending the corresponding advertising dollars, then it has to be a profitable venture. Yet a "free" product doesn't exactly generate profits, so there has to be some kind of exchange of funds going on in order to generate those profits. Viewed from this angle, it then becomes very interesting to wonder if those offers are really free? Or do they come with strings attached?
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.
Like we said previously, most of the credit report offers do carry a cost. Banks and other lending firms have been touting free credit reports for years now, but what they really are offering is a subscription service where you get to check your credit report any time you want. This service is managed either by them or is the result of a partnership with one of the three major credit bureaus, Equifax, Experian, and Transunion. There are more than 3 credit bureaus operating in the US, but those three are pretty much the only ones that count.
Because of the rise of identity theft, there has been a steep rise in the number of companies in the "identity protection" business. What they typically do is that they offer a "free" credit report, which is linked to a membership service. While the focus in the advertisements is on the free report, the fine print on most of these offers clearly states you are agreeing to subscribe to such a service, usually three months to a year at a time, that charges you a monthly fee. This fee, which can range from $6.95 to $19.95 per month, entitles you to a service that alerts you to suspicious activities, credit inquiries and late-payment notices on your account.
Because of the Fair Credit Reporting Act (FCRA), the "big three" credit bureaus are legally obligated to give anyone who asks for it one free credit report every year, which means that you're eligible for three free credit reports a year. Whether you request it online, by mail, or over the phone, be sure to follow the instructions given to you so that you can receive your free, no strings attached credit report.
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.
In case you didn't know it, there's a tremendous amount of competition in the banking industry. In order to keep customers or bring in new ones, banks constantly have to improve their offerings. So some banks have been offering a free credit report, and some form of basic online service that allows you to view and monitor your credit score, when you do business with them, either by getting a credit card issued by them or opening up a bank account with them. Highly desirable (and equally selective) credit cards issuers, such as American Express, also offer their best consumers very competitive packages of services, with credit report access and monitoring almost always being included at no extra cost.
Some people only use credit sparingly. They have no need for continuous monitoring of their credit reports or anything like that. If that's you, all you need to do is to ask one credit bureau for a credit report every 4 months, just so you can check that your accounts are accurate and that you haven't fallen victim to identity theft. If you need more than that basic level of monitoring, then you can turn to the companies that offer such services in their package deals so that you don't have to pay extra for it.
With so many aspects of your life being impacted by your credit report (credit, insurance, employment), there's no need to stress the importance of monitoring your credit report. Should you spot any errors, you should definitely take action as soon as possible to correct them. And there's no reason why you shouldn't be on top of this: odds are, you won't even have to pay to get your credit reports.
About the Author:
We have been advising people for years to get a really free credit report with no trial, instead of having to pay for the service. For more of the same type of quality financial advice, visit our personal finance blog.
posted by Debt Consolidation Loan at
3:23 AM
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