With so many companies advertising free credit reports on national television, it's becoming increasingly hard to separate the wheat from the chaff. Because if the advertised offer is really free, then can the company justify paying for national advertising? And it's not like the campaigns ran and then stopped all of a sudden. They've been on the air for years now, so it has to be a profit-generating venture. And they all seem to be hell-bent on showing you what horrible things can happen to you should you not get your free credit report, while minimizing the fact that they're just as intent on selling you something.
Where does the truth lie (I know, wrong choice of words) when it comes to those free offers. It's true that with all the publicity that has been given to scams of all nature, people have grown increasingly wary of free offers. Yet if the ads keep airing it's because some people are still biting. Which begs the question: which of these offers (if any) are really free?
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.
By now you can probably tell that most of these free credit reports offers have a cost. Most of the major banks and lending firms offer "free credit reports" that are really subscription services (which offer anytime access to your report) offered either by them or by one of the major credit bureaus that they have a partnership with. Those three credit bureaus are Equifax, Experian, and Transunion. While there are more than three credit bureaus, those three are the ones that count and which all companies get their information from and report to.
Because of the rise of identity theft, there has been a steep rise in the number of companies in the "identity protection" business. What they typically do is that they offer a "free" credit report, which is linked to a membership service. While the focus in the advertisements is on the free report, the fine print on most of these offers clearly states you are agreeing to subscribe to such a service, usually three months to a year at a time, that charges you a monthly fee. This fee, which can range from $ 6.95 to $ 19.95 per month, entitles you to a service that alerts you to suspicious activities, credit inquiries and late-payment notices 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.
Some people only use credit sparingly. They have no need for continuous monitoring of their credit reports or anything like that. If that's you, all you need to do is to ask one credit bureau for a credit report every 4 months, just so you can check that your accounts are accurate and that you haven't fallen victim to identity theft. If you need more than that basic level of monitoring, then you can turn to the companies that offer such services in their package deals so that you don't have to pay extra for it.
With so many aspects of your life being impacted by your credit report (credit, insurance, employment), there's no need to stress the importance of monitoring your credit report. Should you spot any errors, you should definitely take action as soon as possible to correct them. And there's no reason why you shouldn't be on top of this: odds are, you won't even have to pay to get your credit reports.
We recommend that people get a free credit report, no trial, no credit card required, without paying money for the service. If you need more finance tips, visit our personal finance blog
Orignal From: Hidden Costs Of Free Credit Reports & How To Avoid Them
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