"F-R-E-E that spells free, credit report dot com, baby..."
The commercials are catchy, quirky and make a good point- check your credit reports or you won't discover things that may negatively impact your score. So is freecreditreport.com the place to do this?
A little history first: Several years ago, Congress passed a law that forced all three credit agencies, TransUnion, Experian and Equifax, to provide one credit report per year to the consumer for free. To comply, the agencies set up a website, www.ANNUALcreditreport.com, to allow consumers to order their free report from any or all of the agencies.
It is no secret that identity theft has been on the rise. The free reports are a step to help consumers combat fraud as well as gain control of their data shadows. As increasing numbers of consumers became concerned, each agency began to offer credit monitoring services. Such a service has an annual fee and monitors activity that effects your credit profile. Alerts are sent to the subscriber indicating changes so the consumer can notice if anything is awry. This is where FREEcreditreport.com (ba-by) comes in. This site is Experian's attempt to sell consumers their proprietary service for monitoring credit called TripleAdvantage(SM).
Frankly, I find this sort of purposely confusing marketing a bit dubious. The agencies know consumers are looking for the free, mandated-by-law, website. Instead they impress the for profit service into the public conciousness. The credit report is free, with a subscription (which you can cancel). Yet the services are legitimate and valuable tools. TripleAdvantage(SM), for example, will monitor your profile at all three agencies with one subscription.
To bother or not, that is the question. It is highly recommended that you periodically check your credit profiles. The "credit report" or profile as I call it is not your credit score (although the score is typically included in the subscription service as part of the offering). Rather the credit report details all of your credit related activities- all credit cards account, open or closed; mortgage, car, and student loans; utility experience (pay your cable bill on time?); current and past addresses or names; sometimes employment status and lots of other juicy details. Much of the data is compiled from a variety of databases and I would be suprised if you didn't see something that required correction or checking. In fact, it is a bit alarming the first time you read one of these reports.
Should you subscribe? If you have any suspicion of strange activity or recently had your wallet stolen, it might be a good idea. The continuous monitoring will alert you when things change and with ID theft, time is critical in limiting damage. Notice I am particularly worried about ID theft and not necessarily a stolen credit card. You are not responsible for unauthorized charges if you report the card stolen in a timely fashion, but if someone steals your ID it can take years to get it straightened out and ruin your credit in the process.
Without a pressing need for the service, you should simply order the free reports periodically. I usually order one every 4 or 5 months by getting one from a different agency each time to avoid the one per year limit. Note that to verify identity before releasing the report, they ask a number of tough questions like the address number of your previous address.
I tried to freeze my credit report to make ID theft impossible. Sadly since I just turned 18 and moved a few months ago the system doesn't know me.
ReplyDeleteYou may not have a credit history yet, which gives you the opportunity to start off right and keep it that way. You are in the drivers seat, my friend.
ReplyDeleteAny chance you could discuss how credit reports are created. I recently watched "Credit and Credibility" by PBS NOW, see http://www.pbs.org/now/shows/446/index.html where they discussed the role of credit report companies played in the current financial crisis. I'm very interested in the role math has in our daily lives and credit reports seem to depend on a lot of math.
ReplyDeleteThat PBS report is about an entirely different set of "credit agencies". The three I mention above keep personal credit profiles and scores- on individuals. The ones in the PBS link rate the credit of companies and individual securities. I'll leave it at that for now and post on it later. Thanks for the idea- it hadn't even crossed my mind that both services are called "credit agencies", because they are entirely different.
ReplyDeleteradianmatrix-
ReplyDeleteFair enough. In my research, materials have indicated that it takes a bare minimum of three months but have read incidents that have dragged on for well over a year. Admittedly, these are probably the more extreme cases involving more than just credit theft. It is my understanding that if property is transferred (title, bank funds, not just a credit card), it is much more difficult to fix and takes longer. There are reported incidents of someone committing a crime and providing the false ID to the police. These ID frauds are not easily resolved. Incidents that take a very long time are anecdotes of course, so I concede "years" is not an accurate reflection of the average. Thanks for noticing.
And you are completely right that once the incident is resolved, your credit is back to normal. Your credit is not impacted permanantly. I did not mean to imply that at all, but sometimes you don't always write exactly what you were thinking.