Is Your Free Credit Report Really Free?

As we discussed yesterday, it is possible to enjoy free credit reports, provided you go through the Web site set up by the three major credit bureaus. But what about those other Web sites that offer free credit reports? There quite a few of them, just waiting to show you your credit report, and possibly even your credit score. Are those offerings really free? Well, technically they are, but you might have to sign up for a credit monitoring service.

Credit monitoring services

If you have a credit card, you are probably familiar with the concept of the credit monitoring service. Most credit card companies hawk these a few months after you sign up now. Basically, you give a company permission to keep an eye on your credit. If something negative or irregular pops up, the credit monitoring service notifies you. Many people who use these services do so through one of their credit cards, and the monthly fee is automatically charged to the card. But it is also possible to sign up for a credit monitoring service by going online. This is where your free credit report comes in. By signing up to view your free credit report, you are probably also signing up for a credit monitoring service.

Read the fine print

As always, reading the fine print offers insight into what you are really getting. Check to see what king of credit monitoring service you are signing up for when you get your free credit report. There are two main kinds:

• Monthly fee: You pay a monthly fee for the service. It is either charged to a credit card of your choice or debited from your bank account. You enter the pertinent information before you can receive your free credit report.
• Per-item charge: No monthly fee is assessed, but you are charged for each negative item that the credit monitoring service challenges on your behalf. Often, you are not notified that the challenge has taken place until after it is over. Watch out for these, as the service will challenge any negative item. So, if you were late on a payment last year, and the service sees it when you sign up, it will be challenged. And it won´t do a bit of good if the information is accurate.

Getting out of it

Luckily, most credit monitoring services of this sort will let you cancel easily. Some even offer a refund of your monthly fee if you cancel within 30 days of viewing your free credit report and signing up for the credit monitoring service. Additionally, you can usually tell the per-item services to contact you before challenging a negative item. However, this service might come with its own charge. If you decide to go this route, the best thing you can do is take a few extra minutes after viewing your free credit report to cancel the credit monitoring service. It´s usually much easier just to go with the service offered by the credit card company.