Free credit reports. You’ve seen these types of ads before: if you use XYZ’s service, then you can get copies of your credit reports for free. Well, in reality what they are saying isn’t wrong, but you don’t need this type of service to get your copies for free.

Your personal credit reports are available to you for free from each of the Big 3 credit reporting bureaus. Beginning in 2005, Equifax, Trans Union, and Experian were instructed by the U.S. Congress to supply one copy of your credit report to you for free annually on demand. If you choose to order more than one copy from the same bureau within that year you will pay for your report. Moreover, if you want your credit score, you’ll have to pay a fee for this service, generally costing you between $4 and $7 per reporting bureau.

Credit Reports, Credit Scores, Credit Monitoring

On the other hand, there are companies who market free credit scores as part of their package of selling to you copies of your credit reports and credit scores. In these situations you are paying for what is already for free elsewhere while getting your credit score included with that price. Essentially you are getting your credit reports and the free credit score as part of a package which usually includes a credit monitoring service as well. Regardless, you will probably pay more for the combined service than if you were to do the work yourself. Again, since it is a service that you are buying, expect to put out some cash if you choose to go with the free credit score with credit report package angle.

Congressional Mandated Credit Reports

For consumers wanting to bypass these types of offers, a visit to AnnualCreditReport.com is a must. Once again, with this scenario your credit report will be free but don’t look for a free credit score. The previously mentioned $4 to $7 fee will be charged to your credit card, but only if you choose to get your score.

Like so many ads you would do best to shop around and read the legal print. Yes, companies do provide a service by offering reports and scores to you. For some consumers this is a great way to have someone remind them to get copies of their reports and scores along with the added benefit of monitoring your credit for you.

Get Your Credit Reports ASAP

Regardless of what method you choose to obtain this vital information, make certain that you obtain a copy of your credit report and scores today. If you are getting ready to make a major purchase (house, vehicle, college tuition) and expect to borrow money, then obtaining this information in advance of applying for a loan is important. Most credit reports contain errors, mistakes which when corrected can lower your interest rates while increasing the odds that you’ll be approved for a loan.

Tags: annual credit report, college tuition, Credit Cards, credit report, credit score, Equifax, Experian, Student Aid, Loans, Trans Union

TransUnion, who along with Experian and Equifax comprise the three major credit reporting agencies, has agreed to a legal settlement whereby the company must provide free credit-report monitoring to more than 150 million American consumers. The settlement comes nearly one decade after the class-action suit was filed in a Chicago federal court, a case where consumer advocates charged that TransUnion had sold private information to businesses for their own marketing schemes.

Consumers affected include anyone who had a credit card, mortgage, auto loan, student loan, or other open credit card or account from 1987 to May 28, 2008. TransUnion, while insisting that they haven’t done anything wrong, has agreed to provide consumers with two immediate options of compensation or wait for two years for a possible cash settlement from the $75 million fund TransUnion established to settle the case.

The two immediate options are:

• Get six months of TransUnion’s credit-monitoring service for free, which would allow consumers to access their credit reports and scores for unlimited number of times during that timeframe. This service is valued at $59.75.

• Get nine months of TransUnion’s credit-monitoring service for free, gain access to the credit scores used in insurance decisions, and TransUnion’s mortgage simulator service, the latter which can help consumers see how their credit scores impact their mortgage rate. This service is valued at $115.50.

If you choose the first option, you forfeit your right to participate in a class-action suit against TransUnion, but you do retain the right to sue the company yourself. For the second choice, you loose the right to bring any future claims against the company.

The settlement is still awaiting court approval, but not all consumer advocates are happy with the settlement. By law, consumers can already receive one free copy of their credit report annually from the three credit reporting agencies — TransUnion would only have to supply extra copies of the report and provide credit scores, the latter which does carry a fee.

(Source: MSN Money)

Tags: consumer credit, credit report, credit score, Equifax, Experian, TransUnion

One of the keys to having a strong credit record is your credit score, the number the three major consumer credit reporting agencies develop to help lenders decide whether you will receive credit, for how long (your term), and the interest rate that you will pay. The higher your score, the more likely you’ll be approved for a loan and at a competitive rate.

Experian, TransUnion, and Equifax are the three private agencies who track your credit and each one “scores” you based on the financial information that they have about you. Thus, each one will likely return numbers that are different from the other two, but their scores should be in the same ballpark.

Your credit score is also called your FICO score which stands for Fair Isaac Corporation score, a formula developed by Fair Isaac and used by all three credit reporting agencies.

If you are looking to buy a home and are seeking to finance it for 30 years, taking out a $300,000 loan then the most recent FICO numbers would give you the following loan details:

These are national averages, so your loan will look slightly different where you live. As you can see, the $950 per month premium for the person with a score in the low 500s, would add more than $10,000 annually to the loan, that is if they can get approved in the first place.

So, what can you do to raise your score? It can’t be changed overnight, but if your score is too low you can do the following which should yield decent results within 3-4 months time:

Clean up your credit report — that’s right, if there are errors on your report your score could be artificially low. Start off by checking your report first for accuracy before proceeding.

Pay on time — late payments can weigh you down, therefore make sure that you pay every bill on time.

Pay down debt — you don’t have to pay off all of your debt, but if your percentage of debt as related to credit line is over 35%, then that will lower your score.

Clean up an old mess — that unpaid and uncollected money you owe from long ago could be biting you in the backside. Contact creditors and offer to pay at least a portion of what you owe to settle your debt once and for all.

As always, check your credit regularly by ordering a credit report and your credit scores to see where you stand. Obtaining both is a small investment which can pay near instant dividends.

Tags: credit report, credit score, Equifax, Experian, FICO, free credit report, TransUnion