Monday, November 16, 2009
A 'free' credit report can cost you $14.95/month
Although consumers can request free credit reports online at annualcreditreport.com, many are being lured to other sites, such as freecreditreport.com (an Experian company) and ultimately are paying for unnecessary monthly credit-monitoring fees (The New York Times Nov. 3).
Multiple sites advertise "free" credit reports, but you're actually enrolling in a service that will monitor any changes in your credit reports. The only way to get the report at no cost from these sites is to cancel the service during the trial period. And it appears that not many are cancelling. Some nine million consumers are spending nearly $700 million annually on these services, according to Carter Malloy, a Stephens Inc. analyst.
So what does $14.95 a month in credit monitoring get you? Most offers bundle a copy of your credit report with a credit score (a three-digit number, based on the history in your credit report) with e-mail alerts of changes to your credit report through at least one credit bureau.
Yes, credit monitoring will tell you what's being reported to your credit history. No, it won't prevent credit card fraud or identity theft. If someone else is using your credit card, you'll see the charges on your statement, not in a credit report. Credit report monitoring could, however, spot an unauthorized loan or credit card opened in your name. Bottom line: Unless you've been a victim of identity theft, daily credit report monitoring is probably unnecessary.
The Fair and Accurate Credit Transactions Act (FACT Act) of 2003 requires each of the three major credit bureaus to provide one free annual credit report to consumers requesting a copy.
The government-authorized site, annualcreditreport.com, is a portal that sends consumers to one of three bureaus for a free report. Still, be on your guard. Once at an individual credit bureau's site, you'll most likely be offered additional services for a charge. You can, however, take a pass, getting just your free credit report.