Avoid Free Credit Report Scams

Nowadays it seems that every channel you tune into, there’s a commercial for a different company offering you a free credit report. I don’t know about you, but most of the time, when a for-profit company is advertising something, it’s because there’s a sale attached to it. There’s no way the bean counters at any well-run company will keep green-lighting an advertising campaign if said campaign is not turning a profit. And why do all those companies act like they’re looking out for our best interests by offering us a free credit report? What’s in it for them?

Common sense tells us that if the ads keep airing, it’s because the campaigns are successful in reeling in new customers. At the same time, almost everyone knows that there’s no such thing as a free lunch and that “free” is often a bait that scammers use to lure in unsuspecting victims. In that regard, it’s relevant to wonder if those offers are really free? Free as in no monetary exchange whatsoever.

To make a long story short, the answer is that very few of them are really free. But anyone with a minimum of common sense could have figured that out, so we’re going to go into a bit more detail here, without putting you off by being overly technical. We will start off by telling you that very few free credit report offers are really free, but there are surefire ways to tell which ones are and which ones aren’t.

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.

Many of the free credit report offers come from another industry that has been largely fueled by the rise of identity theft: we’re referring to the “identity protection” businesses. Because of the large amount of publicity gathered by the people who have fallen victim to identity theft, people are more inclined to check what’s in their credit report and many of them focus on the “free” part of the offers that are advertised to them. Yet the fine print on these offers makes it pretty clear that upon signing up, you’re also enrolling for some sort of credit monitoring service, at a cost of $6.95 to $19.95 per month, for a period of three months to a year. The service alerts you of suspicious activity on your account, reports credit inquiries suppsedly made by you, and notifies you of late-payment notices that pop up on your account.

With the enactment of the Fair Credit Reporting Act (FCRA), the “big three” credit bureaus are each required by law to offer their customers a free credit report every year. They’re not required to send it to you, though, so you have to actually ask for it. You can do so by mail, by phone, or over the Internet. Be sure you follow the instructions so you can get your free credit report, the one where you really don’t have to pay a dime.

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.

When it comes to competition, few industries push it to the level that banks do. Keeping current customers from going to the competitor and/or bringing them in from the competition requires ever-improving offers. That has prompted many banks to offer stripped-down versions of credit monitoring services as part of their services, as a reward for doing business with them. The terms vary but usually all you have to do is get approved for their credit card or open some type of account with them and you’re good to go. Similarly, the companies that serve the high-end market (like, for example, American Express) also strive to offer their customers a complete suite of financial services, which almost always includes credit report access and monitoring.

There is no reason to pay for any service if all you need to do is look at your credit report every now and then to make sure that your information is correct. For this you can either get all three credit reports for comparison purposes, or space them 4 months apart for continuous monitoring and prevention of identity theft. Should you want to watch your credit more closely, there are plenty of companies out there that offer these services as part of their package of services, avoiding you the extra cost you’d have to incur by going with a dedicated service.

The information in your credit report affects not only your credit eligibility, but also your insurance coverage and terms, as well as your employment prospects, you absolutely must keep a watchful eye on your credit report. Anything that shows wrong and is erroneous should be dealt with swiftly. And you really have no excuse since the many options that have been outlined here prove that you can really get your credit report for free.