Credit Report Source

FTC released funny videos with a serious message, AnnualCreditReport.com is the only authorized source for free annual credit reports. They are funny but are they truly helping consumers or just peddling their own message. Putting aside all of the commercial shenanigans that companies are up to, one thing is the discussion of free credit reports that always seems to missing is whether annual credit reports are enough?

The fact is free annual credit reports are not really that useful to consumers because it wasn’t meant for consumers to use to fix credit history discrepancies. Furthermore, it’s not timely or current. Yet, I don’t see any of the media making that distinction? So who is fooling who?

Ok, here’s the thing, I’m not a credit reporting expert but I learned the hard way about credit scores and high interest rates. I couldn’t figure out why! I have a darn good credit history, applied for a Discover Card yet I was denied. Ordered my free annual credit reports but couldn’t find anything wrong with. I asked a friend who was in the lending business and helped me understand what was going on. Basically, banks, credit card companies and other credit institutions use a credit scoring method developed by FICO (I won’t go into detail but it’s an acronym) called a FICO score. Long story short, it uses the three major credit bureaus; Experian, Trans Union and Equifax to come up with a number from 0 – 850 (could be wrong). If you score high 700s you are less risky and will get a really good interest rate for loans if you’re below 700 you’ll get high rates or get declined. Oh and each credit bureau has their own credit score, my FICO score was 760 while my lowest score was a 695 at Equifax and highest was a 780 at Experian. Turns out that Discover based their decision on Equifax at the time!

I signed up for a credit report service and checked each report from the bureaus side-by-side and found several mistakes. The service I used didn’t have instructions on how to report errors in a credit file so I went back to my buddy in lending business and he basically helped me find letters that I sent to Equifax. He also recommended that I check an updated report to make sure the mistakes were eventually fixed. I did receive confirmation of the discrepancies from Equifax and they made the changes which bumped my score to 720. I re-applied and got my Discover Card…although I never use it anyway.

The morale of the story is that you need to check your report more than once and at all three bureaus since the scores vary widely due to misinformation keyed in by data entry folks at the bureaus or whatever…my gripe with the FTC and the media is that they don’t come clean about the very issues I raised above and whether the free annual credit report is appropriate for that use. Oh well

The FTC even issued a press release:

The Federal Trade Commission today released two videos that highlight the differences between AnnualCreditReport.com and those other sites that claim to offer “free” credit reports. Despite the musical claims of some TV commercials, the only authorized source to get your free annual credit report under federal law is AnnualCreditReport.com.

Despite the musical claims of some TV commercials, the only authorized source to get your free annual credit report under federal law is AnnualCreditReport.com. To reinforce this message, the Federal Trade Commission (FTC) is featuring two new videos with their own catchy tunes. Both videos are available on the FTC’s site as well as on YouTube.

Today at 11am EST, the FTC will have a phone media availability with Eileen Harrington, Acting Director of the Bureau of Consumer Protection, to discuss the videos and answer any media questions. Phone number: 866-363-9013; confirmation number/pass code: 89503788.

The new videos highlight the differences between AnnualCreditReport.com and those other sites that claim to provide “free” credit reports. Other sites require users to pay hidden fees or agree to additional services. For example, some sites provide a free credit report if you enroll in a new service. If you don’t cancel the service during a short trial period, you’re likely to see membership fees on your credit card statement.

The Fair Credit Reporting Act requires each of the nationwide consumer reporting companies –Experian, TransUnion, and Equifax — to provide a free copy of your credit report, at your request, once every 12 months from AnnualCreditReport.com, a toll-free telephone number, or a mailing address. Please visit the FTC Web site (www.ftc.gov/freereports) for more details. Reviewing your credit report regularly is an effective way to deter and detect identity theft.

The FTC encourages people to post the videos on their own websites or blogs, and provides tools to help them do so. The jingles also are available as 30-second audio public service announcements at www.ftc.gov/freereports.

Credit History, Credit Reports, Credit Scores