SACRAMENTO, Cal. - If you're not careful, getting your "free" credit report could wind up costing you.
Plenty of TV, radio and Internet ads promise consumers a copy of their free credit report, but what they really want is to entice you into signing up for "credit monitoring" or other services. And those are decidedly not free, running anywhere from $15 to $30 a month or more on your credit card bill.
That's despite federal regulations that require sites offering free credit reports to provide full disclosure about trial memberships and a link to the federally authorized AnnualCreditReport.com.
That's the only website that is federally authorized to provide consumers with free annual credit reports. By law, everyone is entitled to a free credit report once a year from each of the three credit reporting bureaus: Equifax, Experian and TransUnion.
In addition to the official AnnualCreditReport site, several companies will give you a free credit report and an estimated credit score -- with no strings attached. They include: www.Bankrate.com, www.Credit.com, www.CreditKarma.com and www.CreditSesame.com.
The scores you receive are not the same as a FICO score, which is considered the industry's gold standard and is used by most lenders. But these score estimates are based on the same credit history factors that go into a FICO score, said John Ulzheimer, consumer education president at www.SmartCredit.com.
On its website, the FTC warns of "impostor" websites that are not part of the AnnualCreditReport.com program.
In some cases, the "free" product requires that you provide a credit card number, which is used to enroll you in a trial membership for various credit monitoring services. If you don't cancel during the trial period, you could unwittingly be agreeing to let the company charge fees to your credit card.
With all the fears of identity theft, paying to monitor credit reports can be useful. You'll receive a text or email message any time there's a new balance, a new inquiry or other changes on your accounts.
But it's not essential for everyone.
"If you are a shredder of anything that contains financial information, you're probably OK," said Ulzheimer. "If you don't toss your credit card statements or tax returns into the garbage and you don't leave your credit card sitting on your desk at work, "then you probably don't need credit monitoring."
But, he said, "If you share a mailbox with 400 other people in an apartment building, it might be something you should consider."
That's because the odds of something getting misdirected are greater.
Another option if you're concerned about possible fraudulent activity on your accounts: Request a "fraud alert" or "credit freeze" from the three credit bureaus. An alert tells potential creditors that fraudulent activity is suspected on the credit file. A freeze (which costs $10 per bureau; $5 for seniors or free if you have proof of identity theft) prevents anyone -- lenders, insurance companies, employers -- from seeing your credit history, unless you give permission.
CREDIT REPORTS 101
There's often confusion about the difference between a credit score and a credit report. The terms are often used interchangeably but they're not the same thing.
A credit report is a history of your bills, loans and credit card payments. It's free once a year from www.AnnualCreditReport.com .
A credit score is a three-digit number based on all the information contained in your credit reports. A credit score is used by banks and lenders to determine the interest rates you'll pay for credit cards, mortgages, student loans, etc. The higher your score, the better your interest rate.
By federal law, everyone is entitled to one free report, once a year, from each of the three credit reporting bureaus. To get your free copies, go online to the official site, www.AnnualCreditReport.com, or call (877) 322-8228.
To contact the three major credit reporting bureaus -- for a fraud alert, security freeze or extra copies of your credit report, go to:
www.Equifax.com , (800) 685-1111
www.Experian.com , (888) 397-3742
www.TransUnion.com , (800) 916-8800
You are entitled to an additional free credit report if you are denied employment, insurance or a loan due to information contained in your credit report. You must make the request within 60 days of being notified that you were denied. Also, those on welfare or who are victims of fraud, such as identity theft, also are entitled to a free credit report.
Distributed by Scripps Howard News Service
Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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