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Really Totally Free Credit Report

By: EconomyWatch Date: 25 August 2009

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Credit reports contain information regarding several critical aspects of an individual's financial background, including credit card accounts, loan history, adverse legal issues (if any) and employment history. This information is used by lenders to determine the viability of accepting application for loans, such as mortgages, home equity and auto loans, from people. While credit reports can be obtained from credit reporting agencies (CRAs) at a small fee, consumers can apply for one free copy of their credit report from the key CRAs once every year as per the FCRA (Fair Credit Reporting Act).

Really Totally Free Credit Report: Myth or Reality?

There are several websites, such as FreeCreditReport.com, that claim to offer free credit reports from the three bureaus, Experian, TransUnion and Equifax. The FreeCreditReport.com website is owned by Experian. However, the FTC (Federal Trade Commission) has specified clearly that the AnnualCreditReport.com site is the only authorized source from where individuals can obtain their free annual credit report under the federal law. The FTC has also released two videos to reinforce its message.

The new videos:

Highlight the differences between AnnualCreditReport.com and the other sites claiming to provide “free” credit reports. While some of these sites require users to pay hidden fees, others require them to agree to additional services for a trial period. However, if you are unable to cancel the service during the trial period, you will be charged the membership fee.
Act as a consumer awareness campaign. It also ask consumers to beware of the FreeCreditReport.com site, which claims to provide free reports but sends the report only when consumers sign up for their monthly service, worth $15.
Help resolve the misunderstanding created through “confusion marketing,” which enables companies like Experian to trick consumers into paying for something that is free.

Really Totally Free Credit Report: Counter Arguments from Equifax

Although Experian has not commented on the FTC spoof ads, it has issued a statement mentioning that consumers signing up at FreeCreditReport.com receive valuable services. According to Experian, FreeCreditReport.com:

Provides its members continuous access to their credit report and credit score, while AnnualCreditReport.com offers only one free credit report every 12 months.
Monitors a consumer’s credit reports from all the three national CRAs.
Alerts members through e-mail if changes, such as the opening of a new account, are detected in their file. This can help members identify identity theft at an early stage.