What You Get With Free Credit Reports

By Gerri Detweiler
The Union Credit Doctor 

Catchy jingles and splashy online ads have lured many consumers to websites offering “free” credit reports or scores. But many consumers who tried these services later found out these so-called “free” credit reports were really just introductory offers for paid credit monitoring services.

Thanks to new rules required by the Credit CARD Act, online ads for free credit reports now carry warning labels letting consumers know that the only official source for their federally mandated free credit reports is AnnualCreditReport.com. Similar rules will go into effect for television and radio advertisements beginning September 1, 2010. And when consumers do go to AnnualCreditReport.com for their free reports, they are less likely to be sidetracked by ads for other products and services offered by the credit bureaus.

Reviewing your credit reports from time to time is like getting a dental checkup. It may not be one of your favorite things to do, but it can prevent headaches – and save you money – in the end.

Under federal law, you can order one free copy of your credit report each year from each of the three major credit reporting agencies - Equifax, Experian and TransUnion – at AnnualCreditReport.com. Some experts advise staggering your requests so you get one report from a single agency every four months. However, I suggest you go ahead and get all three credit reports at once. This is especially true if you have not checked your reports for a year or more. Credit reporting agencies don't share information with each other, so if one of your reports contains a mistake or negative information, it's important to find out about it as soon as possible.

If you find errors, you can dispute them directly with the credit reporting agencies or the creditors furnishing the wrong information. You'll also want to clear up mistakes like a wrong address or misspelling of your name. With lenders looking for even higher credit scores than in the past, it's important to make sure your credit reports are accurate.

Should you ever pay for credit reports or scores?

If you are planning to apply for an important loan like a mortgage, student loan or auto loan, it's a good idea to order your FICO credit scores ahead of time so you know where you stand. You may also want to consider subscribing to a credit monitoring service if you need to keep tabs on your credit. If your purse or wallet was misplaced, or you found a virus or spyware on your computer, for example, you may want to monitor your reports for unusual activity that could be a sign of identity theft. Similarly, if you are going through divorce, move often, or are trying to rebuild your credit, you may also want to review your reports frequently to spot problems.

Keep in mind that union members are not responsible for any fraudulent transactions made on their Union Plus Credit Cards.

What Your Free Annual Credit Report Won’t Give You…

1. You won’t get a credit score, unless you purchase one. But you may want to be careful about purchasing a credit score at AnnualCreditReport.com, since you may not be getting a FICO score (see below).
    
2. You won't get an analysis of your credit information. Is your credit good? Bad? In between? You’ll need a credit score to help you understand where you stand and how you compare to others.
    
3. You won’t get credit advice. To learn how different actions such as closing an account or taking out a new loan may affect your credit scores, consider using a score simulator like the one offered by FICO. It will let you play with different what-if scenarios and see how they may affect your scores.

Tip: Union members are entitled to a 15% discount off all FICO credit reports, scores, and credit monitoring services

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