Advertisements for free credit reports are promoted on television, radio, and online. How do you know which one is legitimate? In this article we will explore your rights to access your free credit report and why sites offer them for free.

 What is permitted by law?

First, let’s examine the law regarding access to credit history reports. The Fair and Accurate Credit Transaction Act, FACTA, states that you are entitled to receive one free credit report from each Credit Reporting Agency, CRA, within a twelve-month period. To get your free credit reports online visit www.AnnualCreditReport.com. You can request your free credit reports from all three of the major credit reporting agencies- Equifax, TransUnion and Experian.  AnnualCreditReport.com was developed by the Federal Trade Commission and the three major credit reporting agencies to make it easier for you to access your free reports.

 Why do websites offering free credit reports?

Plain and simple, it is a marketing gimmick.  The purpose of offering free credit reports is to get you to provide information in exchange for the free credit report. That information can then be used, sold or shared with the website’s partners or, in the case of an illegitimate websites, to be sold online to identity thieves.

Illegitimate (Scam) Websites

These websites were developed with the sole intention of obtaining your sensitive information. These types of websites are becoming more and more difficult to identify. These websites look like a legitimate website. The website may have https and a padlock which we are often told to look for before entering sensitive information online. Illegitimate websites may even be listed in the results of an online search for free credit reports. Just because a website is listed does not mean that it is a safe website. Because of this is, it is best to avoid searching online for “free credit reports.” Stick to the well-known websites such as the credit reporting agencies (Equifax, Experian and TransUnion) or AnnualCreditReport.com.

Bait-n-Switch Websites

These websites offer you access to your credit reports for free. However, before you can view your credit reports you must register and pay for credit monitoring. There are two problems with these websites.

  1. The credit reports you receive are not the full credit reports. You will receive a summary report that contains information from all three credit reporting agencies. However, the summary report does not contain all the information from your credit history reports. Why not request your credit history report from AnnualCreditReport.com and receive all the information?
  2. The website may offer you a free trial of their credit monitoring but then require you to enter a credit card number. Some of these websites will immediately charge your credit card for the monitoring service or make it nearly impossible to cancel the service. To make matters worse, these types of charges are often difficult to dispute with your credit card company as you have entered into an agreement with the company and have authorized the transaction or transactions.

Companies cannot survive without generating revenue.  If a company is giving away their primary service for free, ask yourself, how are they making money?

Legitimate Websites with Creative Marketing

There are multiple websites that use “free credit report” as creative marketing to entice you to use their service. A red flag of these types of services is that their services are provided free of charge. Companies cannot survive without generating revenue. If a company is givign away their primary service for free, ask yourself, how are they making money?  This could be through selling your information or through ad placements. Many of these free services are merely an advertising agency disguised as a free service. Here is a closer look at the terms of service agreement for a  popular website promoting access to free credit reports and scores. The name of the website has been replaced with “company.”

  • They provide you with free credit reports from two major credit bureaus. That means that you are not able to obtain your report from the third credit bureau. This is important as not all creditors report to all three credit bureaus. Evidence of identity theft could be on the third report that is not provided to you from “company.”
  • You are giving them consent to obtain your credit information at any time. I understand that I am providing written instructions in accordance with the Fair Credit Reporting Act and other applicable law for “company” and affiliated companies to request and receive copies of consumer reports, scores and other information about me from third parties, including, but not limited to, TransUnion and Equifax. I understand that my instructions let “company” and affiliated companies obtain such information at any time for as long as I have a registered “company” account to use as described in the Terms of Service and Privacy Policy.

The privacy policy for the same website reveals additional information.

  1. What information we collect.

Personal Information: This is information that identifies you personally, such as your full name, street address, email address, Social Security number or phone number.

Non-Personal Information: This is information about you or your household that doesn’t identify you personally, like your gender, income or what types of financial products you’re interested in.

  1. When we share the information we collect.

We do not share your credit reports or scores with unaffiliated third parties (except agents acting on our behalf; we explain that below). Translation, they share your information with affiliated third parties.

  1. Canceling your membership and deactivating your account.

Due to our recordkeeping and information retention requirements, we do not delete information about you upon deactivation. We will, however, disable your account and stop sending you further communications. Translation, they keep your information, but they will stop sending you ads and other promotional emails.

As you can see, when you use these types of website services you may be providing your information to multiple organizations or permitting the organization to retain your information even after you have terminated your account.  Instead of falling for this creative marketing gimmick go directly to www.AnnualCreditReport.com to obtain your free credit reports.

Written by Carrie Kerskie

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