“Free” credit reports are rip-offs

Posted by & filed under Misc.

Credit is a bane (and savior) of American existence. Almost everyone (including some pets) has a file in credit reporting agency. And more and more aspects of everyday life depend on how “credit-worthy” you are.
I’m not sure how exactly someone managed to convince, say, car insurance companies, that people who are not deeply in debt and haven’t declared bankruptcy in last 7 years, are less of a risk while driving their car. Because that’s what the auto insurance should be concerned about — how good of a driver you are, how many accidents and speeding tickets you have had in the past.
But no, your credit score means better or worse rate of auto insurance. Along with the APY of your credit card, how good of a home loan you can get etc etc.
Of course in ideal world the information collected by the credit reporting agencies should be easily viewable by you, the subject of this report. As well as easily correctable in case of some error.
In real world, I bet credit reporting agencies would love to never show any information at all. But by some miracle, consumers do have a FACT Act, that requires credit file report disclosure from three major reporting agencies. You can do it once a year, and then see if any of your banks were too lazy to report accurate information.
So far so good.
Except the central site to request these really free credit reports, for some reason was not placed under .gov domain. Instead, it’s https://www.annualcreditreport.com. And a number of other “credit-report” sites is enormous. Almost all of them offer in one or other form a subscription. Usually it’s a “credit monitoring service” and usually it costs pretty penny, every month.
Funniest thing is that the credit reporting agencies themselves run these types of sites (for example heavily advertised freecreditreport.com is owned by Experian). And for someone who isn’t very good at reading several pages of a fine print, difference between “not really free” and really free report site is not obvious.
Given a number of complaints from customers, new guidelines were issued for fake-free credit report sites, that they must show clearly a note:

Free credit reports are available under Federal law at: AnnualCreditReport.com.

But here comes “marketing BS” moment: hey’re so greedy, they don’t even want to provide a link to the AnnualCreditReport.com. No doubt, because it costs them money — some silly customer may click and not inadvertently sign up for expensive service. Shame on them.

Oh yeah, and they are paid when companies request your credit report. It’s just that ripping someone off by selling to them the same information for a higher prices than business would pay, is one of those irresistible business opportunities nobody wants to pass up.
Bonus BS factor: in most cases where credit report companies advertise a chance of ordering your “credit score”, it’s not really the same credit score, that bank or other company would get when they check your credit. It’s a “similar” score. Because the worst fear of credit agencies is that customers will actually figure out exactly, what factors have what weight, and play the system.

So… get the report once a year from the AnnualCreditReport.com and run from any site that has at the top the disclaimer listed above.

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