Free Credit Reports that really are free!

If you go to the right place, you are allowed to receive one free credit report per year from each of the three major reporting agencies.  The problem is there are a lot of advertisements that say they offer free credit reports, but you really have to sign up for credit monitoring services or some other fee-based subscription.  The government actually passed some very consumer-friendly legislation a few years ago that does get you a free - really, truly free - credit report.  Go to http://www.annualcreditreport.com/ to get your copy.

All three credit reporting agencies are supposed to share their information.  If that's really working the way it should, you should be able to pull one credit report from one agency and have a pretty good idea if you have any issues.  You can pull all three reports at once, but then you don't get another freebie for a year.  I would recommend pulling one report from each agency every four months - they're all free as long as you only pull from one agency per year.  This allows you to monitor your credit throughout the year for free.  If you see a mistake on one report you'll have to go to some effort to get it fixed but then each agency is supposed to share your information with each other. 

For example, if TransUnion says you have an outstanding balance on a card that you paid and closed out last year, you can get a letter from the credit card company, send it to TransUnion with an explanation of the mistake and they should correct their report and forward your information to the other reporting agencies (this takes a while, usually 30-90 days once they verify your information).  To be really safe, I'd send the information to all three agencies, but technically you shouldn't have to.

You won't get your credit score with this free report - it does cost a nominal fee - about $6 per report the last time I checked.  You may not need it if you are just monitoring your accounts, what the balances are and whether or not they are being reported as paid on time.  You won't hurt your credit pulling the report yourself, but there are issues with having multiple vendors pull your report, so be cautious when someone says they'll pull your credit for you.  The exception is when shopping for a mortgage - you can have several loan officers pull reports and if they're all within a two week timeframe it should not afffect your credit score.

Stay tuned next time for things you can do to raise your credit score.