Should I Get a Free Credit Report?

A Credit Article Contributed by Augusta Wilson

What is a Free Credit Report?

A free credit report is quite simply a copy of your credit history, obtained for free. There are three major credit agencies in the U.S., Equifax, TransUnion, and Experian. Every time that you make a payment on one of your credit cards, or make a car loan payment, or even pay your utilities, it usually gets reported to one of these credit agencies. A free credit report details all of this activity, giving you the chance to review the information, making sure that it is accurate.

Are Free Credit Reports Truly Free?

Consumers should be very wary of the offer of a free credit report. Many debt management companies promise to provide you with a copy of your credit history for free, while some other companies choose to charge for this service. Unfortunately, many debt management companies offer you a free credit report, when in fact the acceptance of this free report will lead to other hidden charges, like acceptance of an additional credit monitoring service.

Generally, these online offers may provide the promised credit report for free, but will only provide the report from one of the three main credit agencies, which will give you an incomplete look at your credit history. So, in essence, what may at first seem like a great deal may end up costing you as much as $69.65!

And, as many of these online offers requite that your provide a credit card number to get the initial free report, you may not know that you have been charged any fees, until the fees show up on your credit card statement! In some cases, you must remember to cancel your membership, otherwise you will be automatically charged fees, year after year. 'Free' may also mean a grace period for debt management services, rather than a free credit report.

Again, when you initially sign up at a website to get your report, you will be expected to purchase some other service, as well. So, while it may be tempting to order a 'free' credit report online, there is often a catch in the form of hidden fees.

What Good is a Free Credit Report?

A credit report- whether you purchase it or get it for free- can help you to manage your credit rating and insure your future financial health. It is an important tool which lets you see what activity is actually on your report, so that you can challenge any errors. This is extremely important, because unless you know what your credit score is, you can't rectify any errors, avoiding any surprises, when you apply for a car loan or credit card.

With identity theft being one of the fastest growing crimes, you can't afford to be lax in securing your credit. Many people are not aware that their identity has been stolen, until they receive a phone call from a credit card company regarding a late payment.

There are many pros and cons associated with free credit reports, but in the end, a credit report will help you gain more control over your financial affairs.