How can I get my Free Credit Score?
The last paragraph of this section tells you how you can obtain your free credit score from TransUnion
by September 24, 2008. The Fair Credit Reporting Act mandates that your credit information is
confidential, and should be revealed only to the following entities:
1. creditors to whom you have applied for credit or who have granted you credit;
2. employers who are considering you for employment, reassignment, retention, or promotion;
3. insurers to whom you have applied for a new policy or a renewal of your existing policy;
4. government agencies that are reviewing your financial status or government benefits; and
5. anybody else who has legitimate business and needs your credit information, such as a potential
landlord to whom you have applied to rent or lease property from.
Nobody else, apart from these, should be given access to your credit information, especially without
your prior knowledge and consent.
Recently, a class action lawsuit brought against TransUnion for violating the Fair Credit Reporting
Act made it possible for consumers to get a free credit score. TransUnion allegedly sold lists
containing personal and financial information of consumers to third parties for marketing purposes.
The company claims it did not do anything wrong. Whether the company is found guilty or not, millions
of people were victimized through their confidential personal and financial information used – without
their knowledge and consent – by the company for mailing list selling purposes.
The settlement for this lawsuit mandates that all consumers who had open credit accounts, loans, or open
lines of credit from a credit grantor during the timeframe stipulated in the judgment are entitled to
free credit monitoring services from TransUnion, which includes access to their free credit score.
This means that if you had an automobile loan, a bank credit card, a department store card, other retail
store cards, a mortgage loan, a student loan, or a finance company loan anytime between Jan 1987
and May 2008, you can apply to benefit from this settlement. The judgment on the case states that
eligible consumers may choose one of the following options:
1. Enhanced credit monitoring services for 9 months. A consumer who chooses this option will no
longer be eligible for any cash payment or anny further benefits.
1. Credit monitoring services for 6 months. A consumer who chooses this option can also register
to possibly receive cash benefits in case there is a cash distribution, of they may file an individual
lawsuit against TransUnion.
3. Cash benefit. A consumer who chooses this option may also sign up for the 6 months credit
monitoring service. If the consumer receives a cash payment, he/she will not be able to file an
individual lawsuit against TransUnion.
4. Do nothing. A consumer who chooses this option will not get any benefits but keeps the right to
sue the company individually.
For the 6 months credit monitoring package, which retails for $59.75, consumers will be able to lock
their credit report so that third parties such as lenders would not be able to access their report
without their consent, unless allowed by the law. They will also have unlimited daily access to their
credit report and credit score, as well as credit monitoring with a 24-hour email credit
notification service.
For the 9 months credit monitoring package, which retails for $115.50, consumers will get all the
services included in the 6 months package as well as a suite of insurance scores and a mortgage
simulator service.
Consumers who would like to receive benefits from this settlement and get access to their free credit
report and free credit score must register online at here.
Is there anything I need to watch out for?
There are deceptions with free credit scores and reports that you need to be aware of. Credit scores
do not come free. The law entitles you to a free annual credit report
every twelve months, but that report
will not include your credit score. To get your credit score you would have to pay an additional fee
for it, or sign up for credit monitoring programs with credit agencies where the free credit score
is given as a bonus. Under the Fair and Accurate Credit Transactions Act (FACTA) of 2003, credit
reporting agencies are allowed to charge a “fair and reasonable” fee to provide you with your credit score.
You must be very careful when you sign up for offers that give you a free credit score or report,
either on its own or as part of free trials. Some companies may offer the free credit score as a
freebie if you sign up for their credit monitoring services. Even after you cancel your subscription,
the company could continue charging you. There are also other companies that offer the free credit
score – entirely free, so they say – but ask you to give them your credit card number, supposedly
for registration purposes, and then turn around and charge you for another product that they are offering.
This was the case with a company called Consumerinfo, who marketed a “free credit report” offer on
television, radio, the internet, and its websites.
Why do I need to know my credit score?
If there is one number that could be more important than your Social Security Number, it has to be
your credit score. Your credit score affects every financial action you take, and sometimes could even
be a major consideration when you apply for a job.
Every time you make a purchase with your credit card, make a payment, apply for a new card, or even
shop online for a loan or for credit card offers, the details about your actions or transactions go
into your credit report. The information in your credit report is then mathematically computed and
converted into a numeric value that is called the credit score.
Credit score is also called fico score,
because of the FICO scoring system. The FICO credit scoring system was developed by Bill Fair,
an engineer, and Earl Isaac, a mathematician,
who founded the Fair Isaac Corporation in 1956. They were able to convince lenders that mathematical
formulas could do a better job of predicting the probability that a credit applicant would default on
payment – even better than any experienced loan officer could. Other credit agencies have since
developed their own methodology of computing for credit scores based on Fico’s model, but the Fico
score remains the most popular and most widely used credit scoring system.
That credit score is what lenders look at when you apply for new credit. It is the number they consider
in evaluating how much of a risk you are in paying back your debts. The higher your credit score, the
less of a risk you would be to lenders, and because of that they would be more predisposed to giving you
lower interest rates, longer payment terms, and lower down payment rates when you apply for new credit.
How high or low your credit score is will affect your chances of qualifying for a loan, being approved
for a new credit card, getting an auto loan, being approved for housing, and even getting a new job or
a promotion.
An example of why you should be cautious and watchful: A violator’s scam is caught
Consumerinfo’s aggressive advertising convinced many consumers to take advantage of their offer –
a free credit report, and along with it a free trial of their credit monitoring service as a bonus.
Consumers were required to sign up to avail of the free credit report, and provide their personal details
as well as a valid credit card number. The website stated clearly that the credit card would not be
charged during the free trial period, and was only required to create the account.
What many people did not realize was that it was not free at all. Consumers who did not cancel within
30 days were charged an annual fee of $79.95.
The Federal Trade Commission (FTC) took Consumerinfo to court on the grounds that its advertising was
deceptive and that it failed to disclose that its free credit report offer was not associated with
consumers’ right to a free credit report under federal law.
The court ruled that consumers who ordered a free credit report from the company’s websites –
freecreditreport.com or consumerinfo.com – between November 1, 2000 and September 15, 2003 would have
to be refunded their money. The court ordered Consumerinfo to refund the payments – which they obtained
fraudulently – by crediting the card that consumers used to sign up for the trial offer.
Consumers who signed up for this trial offer would have the amount credited to their credit or debit
card, and would receive a notice by email or postal mail from the company informing them of the action,
whether the company is successful or not.
Consumers who believed they are eligible for the refund but did not receive any notice from the company
were encouraged to contact Consumerinfo directly through helpconsumerinfo@consumerinfo.com.
Free versus paid credit score: is the low price worth the risk?
The recent developments pertaining to free credit scores, the risks people have to take, and the
confusion resulting from many companies offering differing scores and deceptive offers, should make
you think twice about whether to jump at a free credit score offer. If you are afraid that your credit
card information may be used to charge you without your knowledge or that the free credit score offer
could be a scam, we suggest that you go for a paid service that is legitimate and authorized by the
Federal Trade Commission: myfico.com or annualcreditreport.com. You will sleep better at night knowing
that your credit information is safe.
