Not All Free Credit Reports Are Created Equal

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Even though most of the TV I watch is recorded, and I try to fast-forward through the ads, I still wind up watching some commercials now and then. And one of the campaigns I've noticed most this year--possibly a sign of the times--has been for Maybe you've seen the ads, too; they all feature a band with members in various oddball costumes and a cute lead singer crooning catchy jingles urging you to look after your credit rating by obtaining reports from the site. Here's one of the FreeCreditReport ads.

The trouble is, isn't the place to go for the free credit reports that federal law entitles you to receive once a year from each of the three major consumer credit-reporting companies (Equifax, Experian, and TransUnion). That program is handled at will send you the reports, but only after you sign up for a "free trial membership" in its Triple Advantage Credit Monitoring service, which costs $15 a month.

The service promises to alert you to any activity related to your credit rating, including who has been checking on it. For most people, that kind of service is overkill. And while you can avoid charges by canceling your membership within a week of enrolling, it's a hassle you don't need to go through just to get the reports that offers for free.

In fairness, (which is owned by an Experian subsidiary) acknowledges on its home page that it isn't the government-mandated program, and the site even provides a link to But the Federal Trade Commission has embarked on an education campaign that seeks to fight fire with fire, producing its own videos spoofing the ads.

Like the FreeCreditReport commercials, the FTC videos feature a band singing jingles, but in addition to recommending AnnualCreditReport, they include swipes at the competition. A sample lyric: "Beware of the others, there's always a catch; they claim to be free, but strings are attached."

Because the feds don't have the budget to put the parodies on TV, however, they simply upload them to YouTube. You can easily find them by doing a search for videos.

The FTC is also taking a hard look at companies that promise to help people repair their credit. Recently the agency filed charges in New Jersey federal court against seven related companies, alleging that they falsely promised to remove negative information from consumer credit reports, charged customers up to $2000 (including $300 in advance) for the service, and failed to provide written disclosures required by law.

A Web search for credit repair produces a lot of results, including ads from various companies and law firms. But the FTC says those that promise to remove negative information (bankruptcies, judgments, liens, late payments) from your credit report may well be scams, especially if up-front fees are involved (it's against the law to charge for credit-repair service until it's performed).

The FTC's Web site has a very helpful page about credit repair that not only identifies the common signs of credit-repair scams but also offers guidance on applicable laws and do-it-yourself credit repair. Aside from up-front payments, red flags include a company's failure to inform you of your rights and of actions you can take yourself for free; recommendations that you not contact the three major credit-reporting companies directly; promises to remove accurate information from your report; suggestions that you try to create a new credit identity by applying for an Employer Identification Number that you can use instead of your Social Security number; and recommendations that you dispute accurate information on your report.

Taking some of those measures could land you in prison: Lying on a loan or credit application, misrepresenting your Social Security number, and obtaining an Employer Identification Number under false pretenses are all federal crimes. If you believe you have been victimized by a credit-repair company, file a complaint, either at or via the FTC's toll-free number, 877/382-4357.

But before you patronize a credit-repair company, consider doing what you can on your own. Without paying a dime, you can dispute mistakes or outdated items on your free credit reports by contacting the company that issued the report, as well as informing the company that provided the disputed information. The FTC's Web site even has a sample dispute letter to help you out. Even if your request isn't granted, you can at least ask that a statement of your dispute be included in your file so that others will see your point of view.

If you decide to work with a credit-repair organization, make sure that it provides you with a copy of your rights (the company must do so under federal law) and a written contract, which you should read carefully. At the least it should specify the terms of payment (again, no up-front payment should be involved), details on what services the company will perform, how long the services will take to perform, any guarantees made in marketing materials, and the full name and business address of the company.

Regardless, don't expect miracles: Only time can remove negative but accurate information from your credit report.

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