In 2003, the Fair and Accurate Credit Transaction Act (FACTA) gave every consumer the right to view their credit reports from each credit bureau for absolutely free. Since then, a host of “free credit report” sites have popped up. Most popular is freecreditreport.com, the one with the catchy jingle, that “monitors your credit and sends you email alerts, so you don’t wind up selling fish to tourists in t-shirts.” Unfortunately, many consumers have found out the hard way that credit reports at freecreditreport.com and similar sites aren’t so free after all.
What’s a Credit Report?
Your credit report is a compilation of your credit accounts and related information like when the account was opened, the account balance, and how timely your payments have been. Getting a credit report is often the first step in credit repair and a good idea if you’ve been turned down for a credit card or a car loan. Credit reports are maintained by credit reporting agencies a.k.a. credit bureaus.
There are three major credit bureaus in the United States – Equifax, Experian, and TransUnion. Typically, consumers have a credit report at each of these credit bureaus.
Whenever you make an application for credit, creditors and lenders look at your credit report to decide whether to approve your application. If you have negative information – high credit card balances and several late payments – your application may be denied.
Creditors and lenders also evaluate you based on how good your credit score is, which is a numerical snapshot of your credit report. Credit scores range from 300 to 850 where higher credit scores are better. The information in your credit report directly influences your credit score calculation.
History of the FACTA
The FACTA was added to the Fair Credit Reporting Act (FCRA) in 2003 as a result of the increased instances of identity theft. The Federal Trade Commission (FTC) reported that in 2002, there were about 10 million victims of identity theft.
Many cases of identity theft go undetected until a debt collection notice or lawsuit summons shows up at the victim’s doorstep.
So, at the urging of consumer advocates, the government adopted the FACTA, giving consumers free access to their credit reports and thereby allowing them to detect identity theft sooner and at no cost.
Free Credit Report Scams
Since the FACTA was put into place, a number of websites have popped up claiming to offer free credit reports, but suckering consumers into entering their credit card information and subscribing to a credit monitoring service.
On blogs and message boards across the internet, consumers complain of recurring credit card charges after ordering what they thought was a free credit report. Some can’t figure out how to cancel the subscription and end up cancelling their credit cards to escape relentless charges to their cards.
These imposter sites do in fact provide a free credit report, but only after you sign up for a trial membership to a credit monitoring service. Your free trial may last as short as a week or as long as a month, but, in either case, if you don’t remember to cancel membership before the trial ends, you’ll get charged.
In 2005, Experian, one of the three major credit bureaus and owner of freecreditreport.com, settled a lawsuit with the FTC regarding “free” credit reports. The lawsuit claimed the bureau misled consumers about entering credit card information for a free trial and about their association with the government’s annual free credit report program. Experian ended up settling for $950,000.
Get Your REAL Free Credit Report for Free
The one and only place to order your government-granted free credit report at no obligation is through www.annualcreditreport.com. There are more than 100 imposter websites, according to World Privacy Forum, so you can easily be fooled. Annualcreditreport.com does not require you to sign up for any trial service, nor does it request your credit card information.
To avoid scams, click the link above or type the web address directly into your internet browser, making sure not to misspell it. Secure links can also be found at trusted sites like the FTC.
You can also order your annual credit report by telephone by calling 877-322-8228.