Don’t Be Fooled!
Ready for April 1st? I don’t know how April Fool’s Day began, but usually it just means a few harmless jokes and is kind of fun. I remember a scavenger hunt a few of my students arranged in my room a few years back. Sticky notes directed me to my Staples Easy Button that had been held hostage in one of the cabinets. Practical jokes can be fun on occasion. But when it comes to credit cards and credit reports, I don’t like to be fooled.
When’s the last time you checked your credit report? You’ve probably heard that you should check it, but in the crush of daily life, it is an easy thing to put off. The good news is, it has never been easier to get a copy of your credit report. Here are a few credit report basics.
First, there are three national credit reporting agencies: Equifax, TransUnion, and Experian. By law, you are entitled to get a copy of your credit report once a year from all three agencies. You can get the report from all three at once, or you can spread it out and get a report from a different agency every few months.
Second, you are also entitled to get a copy of your credit report at no charge if someone “has taken adverse action against you” based on information in your credit report. In other words, if you are denied credit on the basis of a report, you are entitled to see the report at no charge. Complete information can be found on the Federal Trade Commission website.
Third, the official website to get your free report is www.annualcreditreport.com Now here is where it gets tricky. There are a lot of websites with similar sounding names. The problem with those websites is that sometimes they are a scheme to get your personal information or sell you things. You can be offered other services from the authorized website, but you are not required to pay anything at all to get your credit report. The catchy songs from “free” credit report or score websites may be easy to remember, but reports from those sites are not really free. In most cases you will be automatically signed up for a monthly service and receive monthly credit card charges if you use them. Does that sound “free” to you? It sure doesn’t to me.
Fourth, while the credit report is free, the credit score is not. The laws do not yet require the reporting agencies to give you the score for free. The last time I checked my credit report, the company (TransUnion in this case) offered a “free” credit score, but it required signing up for a monthly service at $14.95. By looking carefully at the page, there was also a link in very small print that allowed you to buy a score for a one-time fee of $9.95. I decided that was a better deal and decided to buy my score this time. However I don’t feel I need to buy my score each time.
Why would you check your credit report in the first place? There are many reasons, but first and foremost, you want to see that the report is accurate. If anything on the report is incorrect, you will want to be sure to get it corrected before you apply for a loan or a credit card. Sometimes employers even check credit reports on job applicants. People with good credit reports (and consequently good credit scores) get better loan rates. With identity theft becoming such a problem, a check of your report can alert you to someone using your identity. The sooner you find out about identity theft, the sooner you can stop it.
So this year don’t let the joke be on you. Use the official website when you check your credit report!