Confusion on ‘Free’ Credit Report Can Lead to Costly Errors

(The Sacramento Bee/MCT) -

When is free really not free? When it comes to getting your “free” credit report.

If you’re not careful, it could wind up costing you.

Plenty of ads promise consumers a copy of their free credit report, but what they really want is to entice you into signing up for “credit monitoring” or other services. And those are decidedly not free, running anywhere from $15 to $30 a month or more on your credit card bill.

Sacramento, Calif. retiree Jim Fossum found out the hard way.

In May, he thought he was going online to ask for a free copy of his credit report from – the official website for such requests. He got the report with no problem, but was startled when a $29.95 monthly charge popped up on his next credit card bill.

“I got sucked into something I didn’t want,” said Fossum, 82, who isn’t sure how he wound up on a different site,, which started charging him for monthly credit monitoring.

“I found out that if you did not send a letter (opting out) within 10 days, you were automatically subscribed.”

Fossum’s experience is not uncommon. And that’s despite federal regulations that now require sites offering free credit reports to provide full disclosure about trial memberships and a link to the federally authorized

It also comes after a much-publicized Federal Trade Commission case in 2005 against, whose popular ads featured a guitar-playing band with a catchy jingle. Accused of using deceptive tactics, FreeCreditReport was fined more than $1.2 million by the FTC.

“It’s unfair and deceptive to promise consumers something for free and then trick them into paying for products they didn’t want in the first place,” the FTC said in August 2005.

There’s only one website that is federally authorized to provide consumers with free annual credit reports: By law, everyone is entitled to a free credit report once a year from each of the three credit-reporting bureaus: Equifax, Experian and TransUnion.

You can order them all at once. Some credit experts recommend spacing them out over a year, ordering one from a different bureau every four months, in order to have a continuous snapshot of your credit history.

In addition to the official AnnualCreditReport site, several companies will give you a free credit report and/or an estimated credit score. They include:,, and

The scores you receive are not the same as a FICO score, which is considered the industry’s gold standard and is used by most lenders. But these score estimates are based on the same credit-history factors that go into a FICO score, said John Ulzheimer, consumer education president at

“These free score estimates consider the same factors. It’s pretty darn close to what you’d get from FICO,” said Ulzheimer.

On its website, the FTC warns of “impostor” websites that are not part of the program.

According to the FTC, some sites use terms like “free report” in their names. Others have URLs that purposely misspell “,” hoping that you will mistakenly type in their name.

In some cases, the “free” product requires that you provide a credit card number, which is used to enroll you in a trial membership for various credit-monitoring services. If you don’t cancel during the trial period, you could unwittingly be agreeing to let the company charge fees to your credit card.

That’s apparently what happened with Fossum. It took several persistent phone calls to the Tennessee company before he was able to get the monthly credit-monitoring service canceled.

On his first call, Fossum said, the salesperson tried to up-sell him on other services that he didn’t need or want. He asked to speak with a supervisor but, after 20 minutes on hold, hung up. Only after calling back and “not being nice” was he able to get the service canceled.

Even so, the 82-year-old intends to scrutinize his credit card bills to be sure the charge doesn’t show up on future statements.

A call to GoldenScoresLLC was answered by a customer service manager, who declined to comment.

With all the fears of identity theft, paying to monitor credit reports can be useful. You’ll receive a text or email message any time there’s a new balance, a new inquiry or other changes on your accounts.

But it’s not essential for everyone.

“Let’s call it ‘advanced common sense,’ ” said Ulzheimer. “If you are a shredder of anything that contains financial information, you’re probably OK.” If you don’t toss your credit card statements or tax returns into the garbage and you don’t leave your credit card sitting on your desk at work, “then you probably don’t need credit monitoring.”

But, he said, “if you share a mailbox with 400 other people in an apartment building, it might be something you should consider.”

That’s because the odds of something getting misdirected are greater. For instance, a “pre-approved” credit card application in your name could mistakenly go in someone else’s mailbox and wind up in the wrong hands.

Another option if you’re concerned about possible fraudulent activity on your accounts: Request a “fraud alert” or “credit freeze” from the three credit bureaus. An alert tells potential creditors that fraudulent activity is suspected on the credit file. A freeze (which costs $10 per bureau; $5 for seniors or free if you have proof of identity theft) prevents anyone – lenders, insurance companies, employers – from seeing your credit history, unless you give permission.

“It’s really a matter of how comfortable you are,” said Ulzheimer. “We all have to make our own choices.”

Credit Reports 101

There’s often confusion about the difference between a credit score and a credit report. The terms are often used interchangeably, but they’re not the same thing.

  • A credit report is a history of your bills, loans and credit card payments. It’s free once a year from
  • A credit score is a three-digit number based on all the information contained in your credit reports. A credit score is used by banks and lenders to determine the interest rates you’ll pay for credit cards, mortgages, student loans, etc. The higher your score, the better your interest rate.

Getting a Credit Report:

Free report: By federal law, everyone is entitled to one free report, once a year, from each of the three credit-reporting bureaus. To get your free copies, go online to the official site,, or call 877-322-8228.

Credit-reporting bureaus: To contact the three major credit-reporting bureaus for a fraud alert, security freeze or extra copies of your credit report, go to:

  •, 800-685-1111
  •, 888-397-3742
  •, 800-916-8800

Additional free reports: You are entitled to an additional free credit report if you are denied employment, insurance or a loan due to information contained in your credit report. You must make the request within 60 days of being notified that you were denied. Additionally, those on welfare or who are victims of fraud, such as identity theft, also are entitled to a free credit report.