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When Free Credit Reports Aren't Free

I decided to start my financial planning for 2008 right, by requesting a free credit report. I knew that I was entitled by federal law to one free credit report annually from each of the three national credit-reporting bureaus—TransUnion, Experian and Equifax.

I typed “free credit report” into my browser and ended up—no surprise—at I filled out my name and address. I also had no qualms when I was asked for credit card information—for identification purposes, I thought. When my credit report appeared on the screen, I printed out the 14 pages. Done.

A week later I received an e-mail assuring me that no credit alerts had been triggered. Good news, although I didn’t recall requesting that service. But when I found an odd charge of $11.95 on my credit card, I realized I’d fallen for an old ploy. I had skipped the small type that explained “Important Details,” going directly to the big, bold, bright orange box that said “Free Credit Score & Report.”

The result: I had unwittingly agreed to pay for “credit monitoring,” a service of automatic alerts about my accounts.

“The lure of a free credit report is used by the credit bureaus as a way to ‘upsell’ consumers to paid credit monitoring,” says Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group. Mierzwinski calls these programs “hideously overpriced.”

What I learned was this: Any service that asks for a credit card is probably NOT free. Of course I immediately canceled the unwanted monitoring service. But many people don’t notice the charge for months and pay a lot for something they don’t want.

How can you get a truly free credit report? By going to only one place: Type that URL carefully into your browser, warns Mierzwinski. In 2005, the World Privacy Forum reported 233 copycat sites with similar addresses.

That site is the portal to the websites for the three credit bureaus—TransUnion, Experian and Equifax. Don’t be misled: Plow through the various offers until you get exactly what you want: your FREE credit report. (You can also request one by mail by calling 1-877-322-8228.)

Monitoring your credit report regularly is important, especially if you intend to make a major purchase and need a loan. It also allows you to catch mistakes in your credit history or note unexpected activity, which could indicate identity theft.

You can do your own low-tech monitoring, Mierzwinski says, by staggering requests among the three companies and getting one every four months—the “year” begins when you request the first report. To get your free report, you just have to be alert and read the fine print so that you don’t make the same mistake I did.

You can also get a copy of your FICO credit score, the number between 300 and 850 that’s a snapshot of your credit worthiness: It reflects your credit history, including late or missed payments, employment, number of credit cards you have and how much credit you have used. A high score of 700 or more means you may get lower interest rates on mortgages and car loans while a score of 450 could have the opposite effect or cause a lender to reject your loan outright.

The FICO number is not included with your credit report, and you can only get it at or You’ll have to pay around $16.

The three primary credit-reporting bureaus also provide another measurement system, VantageScore, which was introduced in 2006; the numbers range from 501 to 990. But the FICO score, developed by Fair Isaac Corporation in the late 1950s, is the one most lenders use to rate your credit, says consultant John Ulzheimer, president of consumer education for, which analyzes your credit history and gives you a free “credit report card.”

“People are very interested in knowing what their scores are, and with good reason” Ulzheimer says. “If there are some negative marks on your credit reports or if you have too much credit card debt, it’s a good idea to know what kind of damage that is having on your scores. And even if you’re not in the market for a new loan, it’s always important to know where you stand.”

The way for consumers to get a good score is clear, says Craig Watts, senior public relations manager for Fair Isaac: “Pay your bills on time and keep credit balances low.”


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