Avoid Unnecessary Charges With Your Free Online Credit
Report
Getting your free online credit report seems irresistible.
You know you need it, the price is right, delivery is
instant…what's the catch? It's the required subscription
to an ongoing credit monitoring service.
These services can cost between $50- $100 or more per
year. You get the option to cancel the service before
any charges start, typically within 30 days. If you're
the type who can remember to cancel plans that start with
freebies, you'll be fine if you're really in it just for
the free online credit report.
Subscription plans = ongoing charges
Consumer credit report vendors, like book & record clubs
before them, make their way primarily through consumers
forgetting to cancel before the free trial is over. Or
by getting used to seeing the monitoring data, changing
your belief over time that it's a level of information
that's absolutely needed. (Idea: put a reminder in your
electronic calendar to cancel, or at least revisit the
decision).
Another hidden charge is that no credit score is provided
with your report (see free
fico score). Though some vendors offer a score with
the free online credit report, it's more typical to only
get the credit report. Scores are all-powerful determinants
of lending decisions and rates for all types of financing,
from home loans to auto loans to credit cards, and even
insurance rates. A free online credit report without a
score is like a math problem without a total-lots of raw
data but no final outcome.
What's more, the free online credit report is pulled from
a single bureau. Two other national credit bureaus are
left out (the three are Equifax, Experian & TransUnion).
The bureaus maintain somewhat different information in
their credit files, as creditors don't always report payment
history to all three bureaus, so consumers really need
to see credit reports
from all three bureaus.
Credit monitoring services: how valuable?
Now let's look at these services and whether it makes
sense to keep them after the trial period. There are a
couple of cases where these services may make sense:
- If you've been the victim of fraud or identity theft
in the past, or suspect it in the present.
- If you do most of your financial transactions and
shopping over the Internet, supplying your credit
card information to several sites each month.
- If you are targeting a major purchase and want to
follow every update to your credit report.
For others, it's probably easier & cheaper to order your
reports once per year, maybe at tax time for ease of remembering.
Paid reports let you choose 3 in 1 formats that include
all data from the three credit bureaus, with at least
one bureau's score. You can get all three scores as well
if you buy from Myfico.com.
The reports are delivered online in about a minute. And-you
won't end up with later charges on your credit card bill
for that free online credit report.
Latest news on free credit reports-available on request
New federal legislation lets you obtain a free
credit report without a credit card from each bureau
once per year simply by asking. Starting December 1, 2004
and phasing in nationwide by September 2005, this service
will make it vastly easier to keep your credit profile
healthy at no cost, though again, scores are not included.
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