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Are Free Credit Reports Really Free?

By Marilyn Katz

Republish: EasyPublish™
Published: 05Feb2010
Word count: 538
Viewed: 255 time(s)

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I see a lot of ads for free credit reports these days. Some are catchy TV ads with baby faced rockers lip syncing the jingle. Others are lined up on web pages. They all advertise free credit reports.

But how can companies spend all of this money promoting a free service? If you have been around the block a time or two, as I have, you probably realize that there must be some kind of catch. Indeed, many of these services are free. But they are also deisgned to get members to sign up for paid offers.

One popular and highly exposed website has thousands of Better Business Bureau complaints right now. When a visitor registers, they must supply a credit card number. If they realize it or not, the credit card will be charged after 9 days if the extra service of a credit monitor is not cancelled.

Is this obvious to the consumer? Thousands of consumer complaints suggest it is not. Many users signed up for the free service, and they were very surprised to see credit card charges.

I am guessing that many thousands more got charged and did not bother to complain. Some members may not even have noticed the charge. The company was probably betting this would happen, and that's how they can spend a lot of money on a free service.

There actually is a US federal law that entitles consuemrs to free credit reports every year. That website is annualcreditreport.com. The 3 big credit reporting agencies all participate so they can comply with the law.

You can get your credit report once a year. Then you can check it for errors. It is very interesting to see a credit report, and you really have every right to see your own information.

Why should you bother to get a free credit report?

Many reports contain errors. These can have a negative affect on your credit score. As you know, lower credit scores mean you pay more for a variety of things. Lenders give their best terms to people with good credit. Some insurers never offer their best rates to those with credit problems. And these days, many employers use credit as one way to screen applicants.

Since your credit can affect how much money you have to pay, and even how much money you might make, you should never leave it to chance. It is very easy to read your own information and look for mistakes. It is also very simple to dispute errors that you find. The credit reporting agency must look into disputes, and very often, they will side with consumers.

I looked at my own report and found a couple of duplicates. This made it look like I had a lot more debt than I really did. I also found one credit card that was listed as closed. That card was open and paid up.

Since potential creditors will look at how much credit you have vs. how much you use, this was not good for me. I did dispute the errors, got them fixed in a timely manner, and then saw my credit score rise by about 20 points. I am sure that this has saved me time and money.

Learn how to repair credit so you can get back to enjoying your life. You may also be able to save money with 0% balance transfers to avoid high credit card interest rates.

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