Don't Buy Your Credit Report

The following is a repeat performance of a post which first ran on July 31, 2008.

Credit report, blah, blah, blah. You might be sick of hearing how important it is to review your credit report. And every personal finance article preaches that you need to review your report often. If you watch any television advertising probably an easy third of the ads are about poor credit, credit scores or credit reports--even if you're watching kids shows.

Most of those ads infuriate me because they hype fear (as most advertising does) and play down the facts. The one that really gets me is the one below.


Yeah, it's cute. It's also a scam. Here is your first clue...they ask for your credit card information. Duh, they are going to charge you for something you can get for free.

FreeCreditReport.com will give your credit score for free, but it will also require you to enroll in their Triple Advantage credit monitoring. The fine print:
When you order your free report here, you will begin your free trial membership in Triple AdvantageSM Credit Monitoring. If you don’t cancel your membership within 9 days of enrollment, you will be billed $14.95 for each month that you continue your membership. If you are not satisfied, you can cancel at any time to discontinue the membership and stop the monthly billing; however, you will not be eligible for a pro-rated refund of your current month’s paid membership fee.

The most misleading aspect of FreeCreditReport.com is their name. It's confusingly similar to the legitimate site AnnualCreditReport.com. In fact FreeCreditReports has a better name than the actual site for ordering your free report. If my memory is correct FreeCreditReport scored that URL long before the official site.

AnnualCreditReport.com is an easy and secure site that lets you receive credit reports from each of the three reporting agencies from one location. You can order all three at once or just one at a time. You are entitled by law to view your each of your 3 reports once every 12 months. Some people like to get all three at the same time to compare. Others like to space them out throughout the year so they can monitor changes.

So here are some Do's and Don'ts

• Do take the message from the cute ads seriously
• Don't follow their links
• Do get your report for free from AnnualCreditReport.com
• Don't ever give credit card information to get your credit report.
• Do make sure you read and understand the fine print of anything you sign up for.
• Don't tune out credit report information, it's important and even though you think you everything those things can change.

Friday Encore: Can You Spot a Mistake?

The following was originally posted April 30th, 2008.

I'm not asking you to proofread, I'm talking about your credit report.

I know you're bombarded everyday about how important your credit score is. And you already a good score to will get you the best loan rates. But while there are oodles of websites that tell you how to correct errors on your credit report, do you know what to look for? What kind of errors could there be? Are errors common?

photo by David Wulff

Last things first: Errors seem to be common. A study by the federation of state Public Interest Research Groups (PIRGs) in 2004 concluded that 79% of the credit reports surveyed contained either serious errors or other mistakes of some kind. Although that was 4 years ago it still seems to be the case. Sad, but true.

First look for obvious errors like misspelling of your name, incorrect present or past addresses, or inaccurate employment information.

Next examine your report for any of the following:

• Information that doesn't belong to you. This really happens. One wrong digit in a social security number is all it takes. So check every line to be sure it's yours.


• Applications for credit that you didn't fill out. Could be fraud or another mistake in the SSN.


• Delinquency that you've already remedied, or an old collection action that is still being reported as overdue. And speaking of bad debt that you thought you erased...

If you recently paid down your credit-card balance to zero but the credit bureau shows a 3-month-old balance, that’s not a disputable error, says Donald Girard, a spokesman for Experian, as long as the outdated balance was correct as of the reporting date.

When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can stay on your report for 7 years. Bankruptcy stays for 10 years. Unpaid judgment against you can be reported for 7 years or until the statute of limitations runs out, whichever is longer.

There is no time limit on reporting information:

• about criminal convictions;
• reported in response to your application for a job that pays more than $75,000 a year;
• reported because you’ve applied for more than $150,000 worth of credit or life insurance.

If you do find errors be sure to dispute them IN WRITING and DON'T EVER SEND ORIGINAL DOCUMENTS. Yes, I'm screaming. It's that important. Check out the ftc.gov for great, accurate information on how to dispute errors.

Friday Encore: What’s behind your credit score?

Friday Encore features a past blog posting that I thought you might not want to miss. Okay, call it a repeat if you want. When necessary the post may be updated with new information or data to keep it relevant. The following was originally posted February 28th, 2008.

What’s behind your credit score?

photo by Wearn

We all know how important it is to maintain a good credit score. But does anyone really know what determines your score? Not really. That is no one except the anaylists at the Fair Isaacs Corporation. FICO the credit score used by most lenders is a creation of Fair Isaacs, which is basically a data analysis company that offers many business analytics in addition to the infamous FICO. The formula used to determine FICO is a trade secret, but they do reveal the following factors that effect your score:

35%--punctuality of payment in the past (only includes payments later than 30 days past due)

30%--the amount of debt, expressed as the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits)

15%--length of credit history10%--types of credit used (installment, revolving, consumer finance)

10%--recent search for credit and/or amount of credit obtained recently

There are many resources for ways to improve your credit score. Often they’ll focus on a few tactics. Some will tell you close unused cards, others will tell you that’s a bad idea. But, as you can see that the weight of the formula is on punctuality and amount of debt. So if your score is low then focusing on anything but the top two isn’t going to move it much.

And what exactly is a good score? Scores range from the poorest at 300 to the highest 900. According to Fair Isaac the median score is 723. According to Experian (using the Fair Isaac risk model) the average credit score is 678. So you want to shoot for your score on the upper end of the scale.

You should review your credit report at least annually. Order your free copy of your credit report at annualcreditreport.com. This site is set up by all three reporting credit reporting agencies: Equifax, Transunion and Experian to enable easy ordering of all their reports.

Don't Buy Your Credit Report

Credit report, blah, blah, blah. You might be sick of hearing how important it is to review your credit report. And every personal finance article preaches that you need to review your report often. If you watch any television advertising probably an easy third of the ads are about poor credit, credit scores or credit reports--even if you're watching kids shows.

Most of those ads infuriate me because they hype fear (as most advertising does) and play down the facts. The one that really gets me is the one below.


Yeah, it's cute. It's also a scam. Here is your first clue...they ask for your credit card information. Duh, they are going to charge you for something you can get for free.

FreeCreditReport.com will give your credit score for free, but it will also require you to enroll in their Triple Advantage credit monitoring. The fine print:
When you order your free report here, you will begin your free trial membership in Triple AdvantageSM Credit Monitoring. If you don’t cancel your membership within 9 days of enrollment, you will be billed $14.95 for each month that you continue your membership. If you are not satisfied, you can cancel at any time to discontinue the membership and stop the monthly billing; however, you will not be eligible for a pro-rated refund of your current month’s paid membership fee.

The most misleading aspect of FreeCreditReport.com is their name. It's confusingly similar to the legitimate site AnnualCreditReport.com. In fact FreeCreditReports has a better name than the actual site for ordering your free report. If my memory is correct FreeCreditReport scored that URL long before the official site.

AnnualCreditReport.com is an easy and secure site that lets you receive credit reports from each of the three reporting agencies from one location. You can order all three at once or just one at a time. You are entitled by law to view your each of your 3 reports once every 12 months. Some people like to get all three at the same time to compare. Others like to space them out throughout the year so they can monitor changes.

So here are some Do's and Don'ts

• Do take the message from the cute ads seriously
• Don't follow their links
• Do get your report for free from AnnualCreditReport.com
• Don't ever give credit card information to get your credit report.
• Do make sure you read and understand the fine print of anything you sign up for.
• Don't tune out credit report information, it's important and even though you think you everything those things can change.

Can You Spot a Mistake?

I'm not asking you to proofread, I'm talking about your credit report.

I know you're bombarded everyday about how important your credit score is. And you already a good score to will get you the best loan rates. But while there are oodles of websites that tell you how to correct errors on your credit report, do you know what to look for? What kind of errors could there be? Are errors common?

photo by David Wulff

Last things first: Errors seem to be common. A study by the federation of state Public Interest Research Groups (PIRGs) in 2004 concluded that 79% of the credit reports surveyed contained either serious errors or other mistakes of some kind. Although that was 4 years ago it still seems to be the case. Sad, but true.

First look for obvious errors like misspelling of your name, incorrect present or past addresses, or inaccurate employment information.

Next examine your report for any of the following:

• Information that doesn't belong to you. This really happens. One wrong digit in a social security number is all it takes. So check every line to be sure it's yours.


• Applications for credit that you didn't fill out. Could be fraud or another mistake in the SSN.


• Delinquency that you've already remedied, or an old collection action that is still being reported as overdue. And speaking of bad debt that you thought you erased...

If you recently paid down your credit-card balance to zero but the credit bureau shows a 3-month-old balance, that’s not a disputable error, says Donald Girard, a spokesman for Experian, as long as the outdated balance was correct as of the reporting date.

When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can stay on your report for 7 years. Bankruptcy stays for 10 years. Unpaid judgment against you can be reported for 7 years or until the statute of limitations runs out, whichever is longer.

There is no time limit on reporting information:

• about criminal convictions;


• reported in response to your application for a job that pays more than $75,000 a year;


• reported because you’ve applied for more than $150,000 worth of credit or life insurance.

If you do find errors be sure to dispute them IN WRITING and DON'T EVER SEND ORIGINAL DOCUMENTS. Yes, I'm screaming. It's that important. Check out the ftc.gov for great, accurate information on how to dispute errors.