Credit Reports And You

April 8, 2010 by thinkhappy

There are many websites and services, like FreeCreditReport.com, that heavily advertise a "free" credit report and score but in fact these free products are usually tied to a credit monitoring service trial, often for only seven days. If the customer doesn't call to cancel the service before the seventh day it is activated with a fee of $15 to $35 per month.

As a result many consumers have been angered by the misleading advertising and confused about where to get a free credit report. In fact consumers have the legal right to get their credit report for free once per year and to dispute errors on their report. Through the CARD Act of 2009, the Federal Trade Commission has amended the rules of the Free Credit Report Rule to require companies who are issuing "free" credit report ads to fully disclose that these are not the free federally mandated reports. AnnualCreditReport.com is the only site that provides the free annual credit report from each of the three main credit bureaus: Experian, Equifax and TransUnion.

As of April 2, 2010 the following rules also go into effect:

*The three credit bureaus can't advertise for other products and services through AnnualCreditReport.com until after a consumer has received his or her free credit report.

*As of July 1, 2010, companies that report information to the three major credit bureaus must improve the accuracy of their information. Consumers have the right to dispute errors on their report directly with the companies that are supplying the information to the bureaus. (Dispute forms are available at the FTC website: FTC.gov. Conduct all disputes in writing, not over the phone.)

*As of January, 2011, creditors must notify consumers if their credit report status has caused a negative change in interest rate terms relative to other customers. Or if the creditors don't want to issue updates of negative credit report information to specific customers they can elect to provide a free credit score and information regarding the score to ALL of their customers.

Credit reports influence a person's employment eligibility, rental lease qualification, utility deposit requirement, mortgage, car loan and insurance rates, and unsecured loan interest rates (like credit cards and personal loans). In short, credit reports and scores have a huge impact on the lives and living costs of consumers. It is important that consumers understand their rights to access their reports and to maintain the accuracy of their credit report information. It is also imperative that consumers actually do what they are legally entitled to do- get their credit report every year and make sure the information on it is correct.

Written by Hollis Colquhoun

Learn more about Hollis Colquhoun

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