When a Free Credit Report Isn’t Free

You may have seen the popular ads promoting sites like FreeCreditReport.com that claim to offer your credit history at no charge. However, many consumers have found out the hard way that these reports are anything but free. Some of these sites provide you with a free credit report, but also ask you to provide a credit card number, presumably for identity verification. What you might miss in the small print is that, upon receiving your credit report, you will automatically be signed up in a credit-monitoring service that charges your card monthly. Unless you cancel within 30 days of receiving your report, you will be charged about $15 per month for this unnecessary service. In this post, we’ll discuss these deceptive promotions in more detail and tell you how to avoid them.

The Advertisements

The deceptive ads in question are for FreeCreditReport.com, which is owned by Experian, one of the three major credit bureaus. The ads feature a young slacker lamenting the fact that he never visited the site to get his free credit report, and he is now paying the price financially. These ads are meant to target a youth demographic, and consumer advocate groups argue that they are extremely deceptive. While the ads claim to offer a free credit report, they don’t reveal that users will be charged for other services for obtaining their report. With sites like these, “free” credit reports are not really free at all.

The Truth

By federal law, you are entitled to one free credit report per year from each of the three credit bureaus. The only site authorized to provide these reports is AnnualCreditReport.com. If you use this site, you can be sure that the report you receive is indeed free. The three credit bureaus must provide you with one free annual credit report, but they also make money from issuing their own credit reports. They do this on sites like FreeCreditReport.com, where they might give you a free report but they charge you $14.95 for credit monitoring. The credit monitoring service is touted as a way to improve your credit and protect against identity theft, when in fact it really does neither. Consumer advocacy groups say that such services are useless and overpriced, and the promise of a free credit report is just a trick to lure consumers into signing up.