Let me tell you a story. During lunch today our phone rang. My husband answered, had a conversation and hung up. He came back to the table saying that it was someone claiming to be from Bank of America who wanted some personal information from him like the last four digits of his social security number.
Even though it smelled like a scam, he was curious about who the caller was and googled their phone number. The number was linked to a collection agency.
He started to get nervous. Not because we have any outstanding debt or any money in collections, we don’t. In fact, that’s what made him nervous. What if, in the most remote chance, that someone had stolen his identity, racked up debt and now they were coming after him, the real Marco Rocha.
That started us on a quest to pull his credit report and credit score to see if anything fishy was happening. It wasn’t. The call was likely a scam, like we suspected all along, but it got me to thinking about legitimate ways to pull your credit report and credit score free of charge.
How to Get a Legitimately Free Credit Report
You are entitled to a free, no obligation credit report from each of the three major credit reporting bureaus each year. AnnualCreditReport.com is the official site to help consumers to obtain their free annual credit report. They provide links right into the three bureaus and make it easy to get see the report.
What we opted to do today was look at my husband’s credit report just from one reporting agency. Since we can look at the report once per year, and there are three agencies with whom we can do that, then we’ll wait 4 months and look at the report from another agency. Four months later we can view a report from the third bureau and voila. We are using the three free annual credit reports to actually see what’s going on throughout the course of a year.
If you haven’t looked at your credit report lately, I’d encourage you to do so. If you notice errors on it, then you can initiate the correction process.
How to Get Your Credit Score for Free
Even though you are looking at a free credit report when you go through AnnualCreditReport.com, you aren’t given your credit score unless you pay. We were tempted to do that today, but you know that I have an aversion to paying for things :)
CreditKarma.com and CreditSesame.com to the Resuce
We discovered a wonderful resource that gives you your credit score free of charge. It’s called Credit Karma.com (edit 1/13/12: I have since discovered Credit Sesame, which is a nearly identical service to Credit Karma. It is also free). My husband and I checked both of our credit scores, which are provided by Trans Union (mine is better than his) :) Plus, there are a lot of neat reports that show how your credit score compares to other Americans, plus simulators that help you understand how your financial decisions may impact your credit score. All in all, I thought it was very cool.
First, let me tell you that you don’t enter a credit card number. There are no hidden fees. There is no fine print that requires you to opt-out.
Credit Karma.com operates on a business model much like Mint.com. Your credit score is paid for via advertising revenue the site earns by providing targeted ads to you while you navigate their site. They may offer you a lower interest credit card or suggest something else that could benefit you financially. You are under no obligation to act on the advertising, but those advertisers subsidize the cost of the credit score.
Is CreditKarma.com Legit?
With CreditKarma.com I did all of that due diligence, since they are handling secure financial information. Everything came back with rave reviews. The site’s been mentioned in the media a plethora of times. It has an A rating from the BBB. It has gotten great reviews from across the blogosphere for more than 2 years (see reviews at Christian Finance’s review and Bargaineering for examples).
For those that still question the safety of inputting their info into CreditKarma.com, let me paste in a portion of Credit Karma’s FAQ:
Is this safe?
Credit Karma is committed to your safety. We follow the latest security precautions to protect your identity and your data. In fact we went a little bit over the top in an attempt to do everything possible to prevent unauthorized access to your information. Our site is registered with VeriSign and Hackersafe. Our office is protected by a 30lb beagle.
I’m a little nervous about entering my Social Security Number.
In order to retrieve your first credit score, we must use your social security number. We only use your SSN for this first score retrieval, and we do not store it in our database. After this one-time use, we will not need your SSN again and it will not be stored on any of our systems.
I have signed up with Credit Karma to get monthly updates on my credit score, but not enough time has passed (it’s only been 3 hours since I discovered the site) for me to have received one. I hope they are useful a useful resource as I monitor my credit worthiness.
How to Opt out of Pre-Screened Credit Card Offers
After sharing this post yesterday evening, some readers that have used Credit Karma for awhile shared their insights. One thing they said was that after creating a free Credit Karma account that they began to receive more credit card applications in the mail. But, you can opt out of many of those by following the instructions provided by the Federal Trade Commission.
Your turn: Have you used Credit Karma before? Thoughts? How do you monitor your credit history?
Update: Introducing WalletHub
WalletHub.com is the only site with free credit reports that are updated on a daily basis. With the latest credit report info, you’ll be able to spot errors, signs of fraud and money-saving opportunities as soon as they appear. You can also get free credit reports on the go with the WalletHub app. WalletHub also has the largest directory of information and reviews on financial products, professionals and companies, and do a wide range of research reports on important personal finance topics. Only WalletHub.com gives you both your full credit report and a summary of important changes. That way, you can easily stay on top of your credit report and never be surprised.
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