You’ve probably seen the TV commercials offering you the chance to
"Get your free credit report now!" One of the most common ad campaigns
features a musical group of 20-something misfits playing guitars as they
work in a restaurant dressed like pirates.
The problem: Those
offers are misleading.
"The Federal Trade Commission has received
complaints from consumers who thought they were ordering their free
annual credit report, and yet couldn't get it without paying fees or
buying other services," the FTC states on its credit report Web site. "TV
ads, email offers, or online search results may tout "free" credit
reports, but there is only one authorized source for a truly free credit
Consumers should "avoid confusing 'free’ offers – which
often require consumers to spend money on credit monitoring or other
products or services," according to another FTC statement.
the FTC is doing its part to help. Its new Free Credit Reports
Rule requires companies that offer "free" credit reports to post
disclosures at the top of every Web page. The disclosure states:
more at FTC.GOV.
You have the right to a free credit report from AnnualCreditReport.com
or 877-322-8228, the ONLY authorized source under federal law.
addition, each website must include a clickable button that reads "Take
me to the authorized source," with links to AnnualCreditReport.com and
The new rule takes effect April 2, 2010 for websites.
The exact wording of disclosures for TV and radio ads has not yet been
decided, so for them the disclosure requirement does not take effect
until Sept. 1, 2010.
Companies may still advertise that they
offer access to free credit reports, even if their only "access" is
offering a link to the official site. But regulators hope that the new
disclosure will reduce the number of consumers who are fooled by scams
in which a free credit report is offered as the bait for other scams.
complaints to the FTC, consumers have said that such offers are often
phishing scams intended to trick them into clicking on sites that steal
their personal information. Others, including freecreditreport.com,
offer "free" reports, but only after consumers pay a membership fee.
is owned by Experian, one of the three major credit reporting agencies.
The FTC’s new rule doesn’t address this directly, but it does restrict
the credit reporting agencies somewhat by requiring them to delay
advertising their products on AnnualCreditReport.com until after
consumers obtain their credit reports.
So why should you check
your credit report in the first place?
For starters, if you have
good credit, you stand a better chance at obtaining credit, loans, or a
mortgage; renting an apartment; getting a decent interest rate when refinancing
a loan; and in some cases, qualifying for a job. If you don’t have good
credit, by regularly examining your credit reports – ideally taking
advantage of the three free credit reports (one from each credit bureau)
each year via AnnualCreditReport.com – you’ll face up to your problem
areas, and be able to get to work on fixing them. And if you have good
credit, this can help keep you on track.
Not to mention that
you’ll be better able to spot – and take action to correct –
inaccuracies in your credit report. The sooner you discover whether a
creditor has erroneously reported you delinquent on an account, or if
someone has fraudulently opened an account in your name, the better. Too
often, consumers who have otherwise been on good credit behavior have
had their financial plans waylaid by errors in their credit reports.