Use Caution With Free Credit Reports

 

Credit Reports

Consumers were entitled to one free credit report from each major credit bureau – Equifax, Experian and TransUnion every 12 months. A credit report includes information such as employer name, contact information, residence history, bill payment history, account types, the balance and monthly payment of each account, the open date and close date for each account, and the responsibility of each account.

Other reasons that a consumer is allowed to obtain a free copy of a credit report denial of credit, insurance, or employment. Consumers can ask for a copy a credit report within 60 days of being notified of the denial. Consumers can receive one free credit report a year due to unemployment and plan to look for a job within 60 days. Consumers who receive public assistance can receive one free credit report a year. Consumers who have been a victim of fraud or identity theft can receive one free credit report a year.

Credit scores

A credit score determines the likelihood that a consumer will pay their bills on time. A credit score uses five factors calculate a consumers’ credit score: Payment History, Total Debt Owed, Length of Credit History, Type of Accounts, and New Accounts. A credit score ranges from 300-850 with 850 being the highest number that can be achieved.

Some websites provide a free credit score such as creditkarma.com, Credit Sesame, Credit.com, Quizzle but they are not affiliated with the mandated government website and the credit score provided is not a FICO credit score which is used by 90% of companies to rate consumers for approval for credit. Credit scores provided by many free credit score websites offer an estimated credit score. The remaining 10% of companies use the Vantage Score, or a credit score developed by one of the major credit bureaus.

Most major banks offer customers a free copy of their credit score.

Consumers can use a FICO Score Estimator tool to get an estimated credit score. The Discover it® Card offers customers a free TransUnion FICO score with their monthly statement. It is best to option a copy of your credit report at www.annualcreditreport.com or call 877-322-8228 to order by mail.

Free Credit Report Websites

Not all free credit report websites are the same and many of the websites display information that is confusing to consumers. Several of the websites use advertising tricks such as similar website names or misspelled websites to catch innocent consumers that are charged for a service they did not realize they purchased and these companies. It can take months before the issue is resolved.

In exchange for getting a free credit score or credit report, consumers risk their personal identity. Many of these companies sell, rent or share consumers’ personal information that increases the risk of identity theft. Many of these companies have little or no security measures in place to protect consumers’ personal information and do not implement any until a data breach occurs.

Many of the free credit report websites offer a free credit report but require a credit card to sign up. The websites may also offer credit-monitoring services for a fee. However, credit monitoring services can be received free of charge if you have been a victim of identity theft. The only reputable website to use is www.annualcreditreport.com to get a free copy of your credit report. The website charges a small fee to obtain a copy of your credit score.