No Debt Plan

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After listening to the annoyingly catchy commercials and radio jingles, I began to wonder if it was a stand alone company. I won’t link to the website because it offers a ’service’ that you can get for free.

However, if you visit the About page, you quickly learn that this is not a stand alone company. The website is owned by a company that was setup by Experian. Experian is one of the credit bureaus.

When you think about it, it’s a genius play. The US government tells the credit bureaus they have to allow consumers access to one credit report per year. To offset the cost of this (and to make additional profit), Experian sets up a for-profit website that offers essentially the same service for a monthly charge. Sure, there may be three people in the United States that can honestly need to spend $15 per month to have consistent access to their reports. The average consumer, not so much.

On top of that, Experian’s commercials for the website, and obviously the name of the website, make it seem like a free service. That seems like a scam to me. It isn’t a free service. The first month is free, then those pesky monthly payments begin.

This also explains how a single website could run a bunch of expensive radio and TV commercials. I can’t attest to the profitability of that company within Experian, but I’m guessing there are a lot of people out there that are signed up and don’t even know it. So don’t use free credit report.com. Instead, use the actual free service from Annual Credit Report.com. You can also check out Master Your Card’s 5 steps to a DIY “Life Lock”.

It’s 2008 - a New Year. I keep a loose schedule of financial tasks I need to complete throughout the year. At the top of the list for early January is checking your annual credit report.

A credit report details out all accounts involved in your personal financial life. These reports are utilized in determining whether or not you are a credit risk for a loan (car loan or mortgage). It details all of your personal information (address, employer, spouse, etc.), as well as what inquiries have been made toward your name. Inquiries are usually fine — it is just credit card companies checking your report; this helps them determine on whether or not to send you a pre-approved letter in the mail.

Let me emphasize: I am not a fan of consumer debt, car payments, and risky sub-prime mortgages. Debt is usually bad. However, there is a use to credit. I’ll discuss this in later posts. To get useful credit, you need an accurate and ‘good’ credit report.

With a report this important, you would expect the three credit agencies (Experian, TransUnion, and Equifax) to have everything down just right. Think again. Credit report errors are reportedly pretty common. You always think, “Yea, but everyone else’s report is incorrect. Mine is spot on.”

Well, that’s what I used to think, too. I checked my report and discovered several errors that I had not caught before. My address was incorrect - we just bought a house this year. My employment information was incorrect - I switched jobs in 2006! Even the spouse information was incorrect, in a somewhat humorous way. My Mom was listed as my spouse because she co-signed on my first car loan when I was 17. Needless to say I put a dispute report in very quickly.

Disputing is a relatively easy process. You can always call a customer service rep with your dispute; I sent mine in online. Within a few days I had an e-mail reply saying my information had been changed. It took maybe 10 minutes of time, but now I know my report is accurate and complete.

We also checked my wife’s report. We discovered several errors - her address was incorrect, and I wasn’t even listed as her spouse. We’re getting this cleared up, too.

Note: I recommend using AnnualCreditReport.com. This is the free service that the credit bureaus offer. You have to pay extra to receive your credit score, but cleaning up your report should suffice. I do not recommend freecreditreport.com. That site is designed to get you to pay a monthly fee to monitor your credit. This is unnecessary. Simply monitor one report from each agency every 4 months. (January 1, May 1, September 1).