Fools and Their Money - Free Credit Reports, DON'T Pay for Them!
Credit ratings, what they mean and what if anything you can do to make yours better are large topics which I will explore in multiple Fool reports.
Unfortunately a lot of people are being tricked into paying for their free credit reports.
What you need to know right off the bat is that there is a federal law saying you can get your credit report absolutely for free without signing up for anything and without paying anyone.
(More details and links are at the end of this report.)
You can learn the government facts about free credit reports at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm
Your credit rating is vital. This is far more useful to your future happiness than knowing who Henry VIII was but they don't teach personal economics in most high schools these days.
The better your rating the less you will pay for a personal, car, credit card, or mortgage loans. Also whether you will need to make deposits to get utility or cellular service and how big the deposit is.
A poor credit rating can also cost you a job because employers see poor ratings as an indication that you aren't trustworthy, or, simply put, not very bright. If you don't care about YOUR money, why would you care about your employer's?
Knowing and trying to improve your report is certainly vital. But merely knowing it does absolutely nothing for you - you can't get a better cell phone or apartment just because you know your credit rating.
And paying for your free credit report probably gets you at the top of a "sucker" list.
The only way to change your rating is slowly by managing your money better and correcting any actual errors such as your residence or employment status.
This takes time - no one can "fix" your credit quickly, although they can take your money and "say" they can do so - we'll go into that issue in a later piece.
But for now you need to know that you can get your credit rating absolutely for free from all three major credit agencies simply by asking.
If someone is heavily advertising a service which will get it for you, be careful - there MUST be a big hook hidden in that offer - most commonly you are persuaded or even tricked into subscribing to some credit "service." If there weren't then how do they pay for those ads?
Most people don't need to monitor their credit reports more than once a year and that is free.
According to the Fair Trade Commission, "AnnualCreditReport.com is the ONLY authorized source to get your free annual credit report under federal law."
You can go to other sites which will get the reports for you, but they will try hard to sell you some service or charge a fee for what annualcreditreport.com does completely for free.
The three credit reporting agencies will all get you one or all three reports but they want to sell you a service or subscription of some sort.
That may or may NOT be a good idea for you. If you make more than $250,000 per year then it is probably a valuable service.
If your kids know what mayonnaise or ketchup sandwiches are then you probably won't benefit.
Remember, getting your credit report is important - you may find multiple mistakes which have been harming you, or credit accounts and loans which you never made (ID theft.) Virtually every report contains errors, my three can't agree on my employer's name.
But don't pay for something that the government says is free.
Of Web sites, ONLY https://www.annualcreditreport.com/cra/index.jsp is authorized to get you all three reports completely for free.
This free site is sponsored by the big three credit report agencies because the government requires them to do so.
There are also links if you wish to request free reports by mail or phone.
As always, think for yourself and remember that if a company can pay for big TV ads they are making a lot of money someplace - probably at your expense.
John McCormick is a reporter, /science/medical columnist and finance and social commentator, with 17,000+ bylined stories. Contact John through NewsBlaze.
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