Beware the Free Credit Report Scam

Category: Finance

I heard about a government website where I can get a free credit report, but after I log in, it seems they want me to buy a 'credit monitoring' package before I get my 'free' report. Is this a scam, or did I miss something in the process?

How to Get THREE Free Credit Reports Every Year

Many people are vaguely aware that they can get free annual credit reports. But when they try to get their free credit report, they may get confused by websites that ask them to buy or subscribe to something in order to get the "free" report. You've probably seen or heard commercials for websites that offer a free credit report, replete with singing and dancing pirates. But the path to obtaining the free report is a little bumpy, and quite often turns out not to be free at all.

FreeCreditReport.com is one notorious example. They want you to pay $1 for a 7-day trial membership, and if you fail to cancel within the trial period, you get billed $14.95 a month forever. You can get your credit report without the trial membership, but they make you wait up to 2 days to receive it. Both federal and state agencies have sued this website (which just happens to be owned by the Experian credit bureau) multiple times for deceptive trade and advertising practices. Stay away.
Free Credit Report Scam

The fact is, you don't have to spend any money to get a free annual credit report. In fact, you can get THREE free credit reports per year, every year!

The Federal Trade Commission enforces the law which requires credit reporting agencies to provide a consumer with free credit reports once a year. In response to consumer complaints about being charged for "free" credit reports, the FTC now requires every Web site offering free credit reports to prominently display this advisory: "You have the right to a free credit report from AnnualCreditReport.com or 877-322-8228, the ONLY authorized source under federal law."

There are three major credit reporting agencies: Experian, Equifax, and TransUnion. By ordering a free credit report from just one of these services at a time, you can get up to three free credit reports during the course of a year. For example, you can order the free Experian report in January, the Equifax credit report in May, and the TransUnion report in September. Repeat the cycle every year, and you can keep tabs on your credit much more often than once a year.

Use This Link To Avoid Credit Report Scams

To avoid confusion and scams, use this link to access the official US Goverment website: AnnualCreditReport.com. You'll start by entering your state of residence; name, address, Social Security Number, birth date, and other personal identification info. To verify your identity, you may be asked to answer questions about your past credit purchases, i.e., "which of these car models have you purchased in the past five years." You can also select which credit reporting agency you wish to use. Results are displayed immediately online and can be printed if you wish.

During the process, you will probably be presented with "upsell" offers for credit monitoring, or your credit score. You're under no obligation to purchase any of these services in order to get your free credit report. I suggest you read my related articles on Credit Monitoring and how to get a Free Credit Score before you decide to purchase either one.

It is wise to check your credit report at least once a year for several reasons. First, identity theft is on the rise; someone may be getting credit in your name and trashing your credit history when he/she does not pay. Identity theft causes long-lasting nightmares for victims. A bad credit history can cost you a job, a loan, a rental, a debt collection lawsuit, and even send you to jail.

Second, credit reports sometimes contain mistakes or outdated information. If you feel the information in your credit report is incorrect, you can challenge it. Write to the credit reporting agency explaining why you feel the report is incorrect; include copies of any supporting documents; and request that the incorrect info be removed from your credit history file or corrected. The credit reporting agency must investigate your dispute within 30 days. If a change is made to your credit history as a result of your dispute, all three credit reporting agencies will be notified along with any organizations to which you have applied for credit recently.

You are also entitled to a free credit report if you have been turned down for credit, received an interest rate increase from a credit card company, or suffered any other adverse action as a result of your credit history. That's in addition to your three free annual credit reports.

Have you used the AnnualCreditReport website yet? Post your comment or question below...

 
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Most recent comments on "Beware the Free Credit Report Scam"

Posted by:

windell johnson
09 Jun 2011

Appreciate what you do. Am a subscriber. Just a comment on the free credit report. I tried all three free reports. I never got a credit score (the single number that is supposed to be so important). I received two detailed reports (and printed them) but no "score". Guess I'll have to wait until next year.

EDITOR'S NOTE: You won't get your credit score from a credit report. See http://askbobrankin.com/free_credit_score.html


Posted by:

Jim Harrison
09 Jun 2011

Best way to remember how not to get scammed on this is to ALWAYS start with a .GOV URL. It is too easy to forget or mistype something when doing this. Start here:

http://search.usa.gov/search?query=credit+report+free

or just start at: http://www.usa.gov/ and search on credit report. If you mistype a .COM you don't know what you will get. Government sites are tightly controlled and will NOT direct you to scammers.

Much easier to remember I think --- and safer.


Posted by:

Terri Ivers
10 Jun 2011

Your articles are intelligent, accurate and sensible. I am an 81 yr. old lady who relies on you to guide me thru the Net World! I print out many and save them in a reference book. Many thanks for your guidance and assistance.
Terri


Posted by:

Lee McIntyre
11 Jun 2011

Those citizens who have put a restriction, perhaps a fraud alert, on their credit accounts are not able to get credit reports instantaneously online. You'll be told (online) you need to print out and submit a paper request. This protects you even further.


Posted by:

Andrea
11 Jun 2011

True, the free credit reports do not come with your credit scores. Each credit reporting agency has it's own credit scoring system, so each of them has their own credit score available separately....for a price.

Most places where you apply for credit will check your FICO scores and the only place to get your FICO scores is at www.myfico.com. You do have to pay for these as well, but in my opinion it good to get them once in a while, especially if you know you're going to apply for credit, a mortgage, a car loan, etc. Many of them rely on other scores besides FICO scores, but you really should know your FICO scores. ESPECIALLY before buying a new car and if you finance through the dealership. They are notorious for telling people their FICO score is too low to qualify for certain rates, etc. But if you get your score beforehand and do some research on it, you can prove them wrong, if your score really is good.

I've had to rebuild my credit in the past and found this to be an invaluable resource to me. I did pay for a yearly monitoring service through myFico where they monitored my scores, I set up certain alerts, adn worked on my credit. It would alert me when my score went up or down or got to a certain point. I only paid for year in order to get on track with my scores. Now I check on them once in a while. Acutally SUze Orman usually offers Fico Kits or offers through them for discounts and sometimes you can find coupon codes as well.


Posted by:

Dave in Indy
15 Jun 2011

Sinceso much is dependent on credit scores, I openly wonder if it's just a matter of time before the government turns up the heat on the credit bureaus or FICO to get free ones for folks too? Of course I'm sure that the bureaus will fight that.


Posted by:

Al in Philly
06 Aug 2011

One Bureau refuses to send me a Report unless I send them my SS Card, actual Drivers License, Utility Bills and W-2. I am retired and on pension. Is it not illegal to require showing your SS Card for ID other than to Financial institution.

You can get free FICO score and all other Credit info at www.creditkarma.com You can get updates at will. Just sign up, it does not share your info with anyone.

I do not work for them, but a highly satisfied member.


Posted by:

SamG
22 May 2012

Good suggestion, Al from Philly. After being forced into an early retirement and bankruptcy last year by the deceptive sales practices of the largest timeshare company I joined creditkarma.com and yes they do provide your credit scores for free. Checked mine twice this year. 2 years ago I had excellent credit. Applied to my bank where I have a checking account for a credit card and was turned down. That bank inquiry cost me 16 points from the scores. Getting offers to buy cars but my 2002 has less than 38k miles and looks good. Going to check my reports right now and see if the BillMeLater 6 month plan shows up there. Recently went on a trip and rented a car from Payless and they accept debit cards for deposit and payment.


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