How To Get a Free Credit Report That’s Actually Free

Category: Things THEY Don't Want You to Know

Wednesday, February 28, 2007

One thing that just about everybody is concerned about is the state of their credit. Even if your finances are in great shape, you can find yourself having trouble getting loans for things like cars and houses if there's a mistake on your credit report.

To make it easier for you to find those mistakes, Congress in 2003 passed the Fair and Accurate Credit Transactions Act (FACTA, also known as the "FACT Act"). One of the key provisions of FACTA requires the three major credit bureaus -- Experian, Equifax, and TransUnion -- to provide you with a free copy of your credit report once every 12 months, should you request it. After FACTA passed, it became common knowledge that you were entitled to a "free credit report".

But how do you get it? The answer is probably not what you think.

If you've turned on a TV anytime in the last few years, you've probably seen an ad for a site called FreeCreditReport.com (a site sponsored by the credit bureau Experian). The ads tell you that this is the place to go to get your free annual credit report.

What they don't tell you (except in the fine print) is that FreeCreditReport.com's reports aren't actually free. To get them, you have to subscribe to a credit-monitoring service called "Triple Advantage" -- which carries a monthly fee of $12.95/month.

In other words, FreeCreditReport.com is Experian's attempt to take lemons -- the requirement that they give consumers a free credit report -- and make lemonade, by confusing you into thinking that you have to subscribe to their service to get your "free" report. Fostering that confusion is why Experian spends so much money advertising FreeCreditReport.com -- they want you to think of that URL when you think "free credit report". After several years of saturation advertising, most people probably do.

You don't need to pay anyone anything to get your free credit reports, if you know the right place to go.  Under the direction of the Federal Trade Commission, the three credit bureaus set up a central Web site where people could obtain the credit reports they're entitled to under FACTA, without any bait and switch. That site is AnnualCreditReport.com, and it's where you should go to get your credit reports.

Unsurprisingly, Experian doesn't spend any money advertising this site. But the FTC says:

The Federal Trade Commission (FTC), the nation's consumer protection agency, wants you to know that, if you want to order your free annual credit report online, there is only one authorized website: annualcreditreport.com.

Many other websites claim to offer "free credit reports," "free credit scores," or "free credit monitoring." But, be careful. These sites are not part of the official annual free credit report program. And in some cases, the "free" product comes with strings attached. For example, some sites sign you up for a supposedly "free" service that converts to one you have to pay for after a trial period ends. If you don't cancel during the trial period, you may be agreeing to let the company start charging fees to your credit card.

In other words -- don't be suckered by a catchy jingle into giving Experian permission to rack up charges on your credit card. You're entitled by law to a free credit report, and you can get it from one place only -- AnnualCreditReport.com.

(And be sure you check your spelling; other unscrupulous parties are trying to pull their own bait and switch by setting up sites at addresses like AnnualCreidtReport.com -- note the misspelling due to the switched "d" and "i" in "credit". My links above all point you to the right site.)

UPDATE (March 4, 2007): One other thing you should know is that the credit bureaus have found another way to make lemonade out of the free-credit-report law; if you request your free credit report, they put your name on the lists that they sell to the companies that send you all those annoying unsolicited credit card offers in the mail. (If you've used a credit card in your life, you're probably already on those lists; but anything that could mean more of those letters is a pain.)

To help you out, I've also posted instructions on how to opt out of those lists so that you stop getting the unsolicited offers for "pre-approved" credit cards once and for all.