February 23, 2009: Today, www.ftc.gov released an article entitled “FTC Amends Free Credit Reports Rule To Help Consumers Steer Clear of ‘Free’ Offers that Cost Money”
This report outlines the fact that consumers are entitled to a free credit report each year from the 3 major credit bureaus – there is no charge and no obligation to leave a credit card number. Consumers can simply go to AnnualCreditReport.com and get their free report.
It goes on to say that “Free Credit Report Sites” such as www.creditscorequick.com are misleading consumers because the credit report providers want them to enroll in a service that will give them access to their credit reports year-round and will alert them when there’s activity on their credit reports.
Beginning April 1, all sites offering free credit reports will be required to include the following:
THIS NOTICE IS REQUIRED BY LAW. Read more at FTC.GOV.
You have the right to a free credit report from AnnualCreditReport.com
or 877-322-8228, the ONLY authorized source under federal law.
The Web site disclosure must include a clickable button to “Take me to the authorized source” and clickable links to AnnualCreditReport.com and FTC.GOV.
That’s all well and good, but the article and the warning both fail to mention three important points.
The first is that no consumer is obligated to continue the service when they obtain a free credit report from www.creditscorequick.com or any similar website. They can get their free credit report and then cancel the service with no payment whatsoever.
The next is that the free reports from Annual Credit Report contain just the information, without analysis or credit scores. If the consumer wants to know their credit scores, they do have to pay. Since knowing your credit score is important, their free service is sadly lacking.
Finally, checking your credit report only once per year is not good financial management.
With identity theft running rampant, a consumer could find himself or herself in a financial and legal morass by the end of a year.
By checking monthly and signing up for alerts, consumers can put a fast stop on identity theft – saving themselves thousands of dollars and months of red tape. In addition, consumers who keep a close watch on their credit reports can catch and correct errors quickly. Those who wait to see their credit reports until they need to use credit are often shocked to learn that a mistake has lowered their credit score – making it impossible to obtain credit at a reasonable interest rate.
Even representatives from FICO admit that over 70% of all credit reports contain errors – and that those errors usually have a negative impact on credit scores.
And that is important. Everyone from the credit card issuer to the mortgage lender to a potential employer or a rental manager will judge a consumer on those scores. But most people don’t know what to do to improve them.
The service offered by credit report providers such as Identity Guard tells consumers the answers – giving a clear reason why a score is lower than it might be. This gives consumers the opportunity to make adjustments and raise their credit scores before they need to use credit.
Wise consumers will decide for themselves: “Is it good enough to see a credit report with no scores once a year, or is my financial future important enough for me to keep a close eye on my credit from month to month.”
Author: Marte Cliff
CreditScoreQuick.com your resource for credit reports, credit cards, loans and credit news.
