The Truth About Free Credit Reports

We’ve all seen the commercials about free credit reports involving pirates and renaissance fairs, but what’s REALLY behind those gimmicks?

Ever been tempted to visit one of those Web sites that promise free credit reports? Don’t. Don’t call them ever. The vast majority of these sites will try to sell you something you don’t want before passing along copies of your free credit reports.

It’s natural to want to get a look at your free credit report. After all, this report serves as the basis for your three-digit credit score. Lenders use your score to determine if they’ll lend you money and at what interest rate. If your credit report contains errors – which you’ll find by studying your free credit reports – it can result in a score that’s lower than what you deserve. If you correct these errors, you can improve your score.

The problem is, most of the free credit report companies out there, including the most famous, FreeCreditReport.com, only provide customers free reports with a catch. Consider FreeCreditReport.com: Consumers must agree to sign up for a seven-day free trial of the company’s credit-monitoring service. If consumers then forget to cancel the service within nine days after accepting the free-trial offer, they’ll find a $14.95 charge on their credit card. That charge will recur until consumers cancel it.

A better option is to go to the only Web site that offers free credit reports without any strings attached. That’d be AnnualCreditReport.com. This site was created as the result of the Fair and Accurate Credit Transactions Act of 2003. Consumers can order one free copy of each of their credit reports – there are three of them, kept by credit bureaus TransUnion, Equifax and Experian – every 12 months through this Web site. And they won’t have to sign up for any credit-monitoring services to do so.

Here’s another interesting fact from the world of free credit report sites: Only four of the 24 free credit report sites analyzed recently by Consumer Reports were unaffiliated to each other. Consumer Reports found that nine were owned or affiliated closely with credit bureau TransUnion, while eight more were either affiliated or owned by Experian. Only four of the sites were labeled as independent by Consumer Reports.

So next time you stumble across an ad on late-night TV or on the Web for a company offering free credit reports, make sure to think before you pay a visit to its Web site or call one of its representatives on the phone. You want to avoid all sites that aren’t AnnualCreditReport.com. In today’s economy, you don’t need to spend money on services or features that you don’t want just to get a copy of your free credit report.