We recently had a question about getting free credit scores.  And with the general public’s growing awareness of the importance of good credit and their credit scores, more and more people are interested.  So what to do and where to go?

The two sites being advertised the heaviest right now are the freescore and freecreditreport websites.   Experian, one of the three major credit bureaus, owns the company advertising the free credit reports.  The free score site is a subsidiary of Vertrue Inc., which this Wall Street Journal article states has had numerous consumer complaints with the Better Business Bureau.

Neither of them offer FICO scores, which is the scoring formula that the majority of lenders use.

And neither of them are FREE!  You get the ‘free score’ or ‘free reports’ after enrolling with… or signing up for….. 

Remember, if you have to give credit card information to get something, IT ISN’T FREE.

WHAT TO DO

For much less than the several hundred dollars per year they charge, you can check your own reports.   Go to www.annualcreditreport.com to get the no-cost reports you’re entitled to each year.  Because we all get three of them, one from each bureau, you can monitor them throughout the year by checking a different one every four months.  Couples with shared accounts can utilize their combined 6 reports each year to check a different one every two months for year-round, effective monitoring. 

Look for accounts you don’t recognize, balances on closed accounts, late payments on accounts that were never late, unknown addresses, incorrect birthdays and social security numbers, and misspelled names.  This article has information on how to request correction of the errors you find.

To get your scores, we strongly recommend that you only pay for FICO scores.  Any other scores are not an apples-to-apples comparison close to the scores that lenders use.  You can go right to the FICO source to get your TransUnion and Equifax FICO scores, with the credit reports, by clicking here.  They are $16 each and you can contact us for current discounts.

NOTE: In February 2009, Experian took away the consumers’ right to get their own Experian FICO score.

Some people have their friend or relative in the banking or mortgage industry get their credit report with scores for them.  This does show actual FICO scores, and they are the exact ones that lender uses.  However, having a company obtain your credit report will result in a Hard Inquiry that counts against your scores.  Checking your own reports and scores is a Soft Inquiry and does not count against you.

SUMMARY
The companies that advertise “free” scores and/or reports, are counting on most people signing up and then NOT canceling their subscription before the trial period ends.  It may be 3, 4, or even 6 months before someone decides they are not using the service and want out.  By then, the company made some money and the consumer spent some on a product they may not have used or even understood.

Be very careful when enrolling in any of these “free” services.  Be sure you read all of the fine print, be sure you have an exit strategy in mind going into it, and mark your calendar or planner with the date you intend to cancel.

It DOES pay to learn about your credit and your scores.  However, you don’t have to pay to just to see your credit report.  And you can pay a lot less than $30 a month to get your true FICO scores.

Thanks, David, for a great question.

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