Beware of "Free" Offers that Keep on Costing
After bankruptcy, it's important to monitor your credit reports and credit scores.but proceed with caution! You may know that you're entitled to a free credit report once a year from each of the three major credit bureaus, but the Internet is a sea of confusing offers that scream "FREE" in their banners and whisper "monthly credit card charge" in the fine print.
The official source for free annual credit reports is www.annualcreditreport.com. The site is sponsored by the three major credit bureaus and, while there are for-pay offers on the site, it's the place to order your free credit report with no strings.
However, for people working on rebuilding credit after bankruptcy or other financial setbacks, free annual credit reports from each of the three major credit bureaus probably won't be enough. For one thing, the all-important credit scores are not included with the free annual credit reports; they have to be purchased separately.
Secondly, anyone seeking to clear up misreporting issues or monitor changes as old accounts are paid off or deleted will need more than one credit report per year. There are dozens of possible products for monitoring credit reports and credit scores, but there are some pitfalls you should be aware of:
- "FREE" Translates to Credit Card Charges Later: Often the large, graphic advertisements on a site tout a "free" credit report, but the fine print discloses that the free report is a bonus for signing up for a paid subscription. If you have to provide a credit card number in order to get your "free" credit report, make sure you know what you're getting into-you're likely signing up for an ongoing reporting service that will bill monthly, or in a lump sum for an entire year. Of course, if those charges are unexpected, they can end up aggravating your credit problems rather than helping you get back on track.
- Waiver of Legal Rights: Lengthy terms and conditions and disclosures put most people off; few bother to read them to the end. However, it's critical that you know exactly what kind of commitment you're making. We've all grown accustomed to arbitration clauses appearing in virtually every agreement and tend to gloss right over them, but arbitration clauses in the credit reporting arena can be dangerous. When you sign up for some credit monitoring services, you agree to arbitration regarding any related claim-and some courts have construed that to include claims against the creditors and collection agencies reporting to the credit reporting agency! Agreeing to that clause could mean waiving important rights to take action against collection agencies or credit card companies under state and federal law. You can't afford to agree to terms you don't understand!
In credit monitoring, as in many other areas of commerce, "free" up front can mean hidden costs, commitments, and even the waiver of important rights. Be sure that you read the fine print and understand exactly what you're signing on for when you order any product, even if it is represented to you as "free".