Is FreeCreditReport.com a Scam?
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Facebook“F-R-E-E that spells FREE, credit report dot com, bay-bee!”
Unless you’ve been living under a rock, you’ve probably heard that jingle a bazillion times. FreeCreditReport.com — sounds great, right? Just sign up and get a free credit report as well as a free credit score. But is it really free? Or is it some sort of scam? They’ve gotten some bad press in recent years, so I decided to investigate.
While I dig deeper below, here’s the executive summary:
In my humble opinion, FreeCreditReport.com isn’t a scam. They tell you up front exactly what you’re getting into, and they honor their end of the bargain. You’re signing up for a free trial of their credit monitoring service, which comes with free access to your Experian credit report and credit score. If you don’t cancel before the trial expires, they’ll charge you. But if you do call them and cancel, you won’t be charged anything.
What does FreeCreditReport.com provide?
One of the first things you’ll notice when you arrive at FreeCreditReport.com is the big, yellow button promising you free access to your credit report and your credit score (pictured below). As just about everyone knows, the free credit report itself isn’t that big of a deal. After all, you can get free access to all three of your credit reports by visiting annualcreditreport.com.
But what about your credit score? Free credit scores are a bit harder to come by, though there are a number of promos out there floating around — e.g., the FreeCreditReport.com offer talked about here, as well as the free trial of myFICO ScoreWatch that I wrote about awhile back.
FreeCreditReport.com — What’s the catch?
As always, it’s important to read the fine print. If you look over to the left side of the FreeCreditReport.com homepage, you’ll see a box labeled “Important Information.” Here’s the scoop:
“When you order your free report here, you will begin your free trial membership in Triple Advantage Credit Monitoring. If you don’t cancel your membership within the 7-day trial period**, you will be billed $14.95 for each month that you continue your membership.”
They go on to specify that they are not affiliated with the federally mandated free credit report program (linked above). The footnote indicates that you actually have nine days during which you can cancel your trial membership since it can take up to 48 hours for the credit monitoring to begin.
Signing up for the free trial
I’m as curious as the next guy when it comes to things like this, so I decided to sign up and give it a whirl. The signup process is actually very easy. Simply visit FreeCreditReport.com, click the yellow signup button, and go through their two step signup process.
Step 1 (below) just asks for your name and address.
Step 2 (below) asks you to create a username and password, provide your personally identifying information (social security number, date of birth, and credit card information. Your card is not charged unless you decide to keep the service beyond the trial period.
After that, they ask two quick security questions derived from information on my credit report, and then you’re in. While they offer to upsell you at various points along the way, you can simply click “No Thanks” and keep going.
Accessing your free credit report and credit score
Once you’ve gained access, you free to view your Experian credit report and credit score. You can either view your report online or download a printable version. They also provide a link to a “Credit Report Guide,” which explains the types of information contained in each section of your credit report, and they have a link for disputing errors from directly within the site.
So… What did I learn from all of this? Well, for starters, there aren’t really any errors on my credit report. Beyond that, I learned that I have a credit score of 796, which puts me in the 99.5th percentile.
They also give you a breakdown of factors that helped and hurt your credit score. Here’s what they had to say about me…
Factors that increased my credit score:
- You have paid your bills on time and currently do not have any overdue accounts or derogatory information, such as a collection, charge-off, or bankruptcy, on your report.
- You have a good cushion of available credit between your current balance and your credit limits on all open trades. This has a positive affect on your credit score. This cushion shows lenders that you are unlikely to overextend yourself financially.
- The total balance on all your credit cards is relatively low compared to your total available credit limit. This has a positive impact on your credit score.
- Your average credit limit for your major credit cards, such as Discover, American Express, VISA, or MasterCard, is high. This tells lenders that you have enough financial experience, and they will be more likely to see you as a good credit risk.
Factors that decreased my credit score:
- Credit scores are calculated based on various factors in your credit report. Currently, your credit report does not show any significant negative or derogatory information.
How to cancel FreeCreditReport.com
Straight from their FAQs, here’s how to cancel:
If for any reason you are not satisfied, you can cancel anytime to discontinue your membership to Triple Advantage Credit Monitoring and stop the monthly billing. However, you will not be eligible for a prorated refund of any portion of your current month’s paid membership fee. To cancel, please contact Customer Care at 1-888-829-6560.
When I was done poking around, I called them up to cancel. After a brief period on hold, the phone rep pulled up my account, verified my identity, and then tried to convince me to stay for the remainder of my trial period. I simply told him that I had signed up to get the free credit report and credit score, and that I hadn’t seen anything after logging in that convinced me to stick around. He then canceled my account. The entire process took less than three minutes (yes, I timed it).
Just to be on the safe side, I called back and asked to cancel my account. The rep that I got this time around pulled it up just as before, and then said that my account was already showing that it had been canceled a few minutes earlier.
Is FreeCreditReport.com a scam?
So… In answer to the original question… FreeCreditReport.com is not (in my opinion) a scam. Yes, some people may erroneously arrive there looking for the federally mandated free credit reports mentioned above, but they clearly state what they’re all about and they honor the terms of the free trial period.
Closing thoughts
When she heard that I scored a 796, my wife decided she had to check hers. We’ve always run neck-and-neck since our credit histories are so similar, though she has often had me by a couple of points in the past (primarily due to a slightly longer credit history, I think).
Well… When she checked, she found out that her score was also 796. Exactly the same as mine. Consider me disappointed… I had hoped I would finally pass her by. For the record, she also found that the cancellation process was a snap — just be firm and clear about your desire to cancel.
So what are you waiting for? Go check your score and let us know if you can beat us. Just don’t forget to cancel if you don’t want their recurring service.
Published on May 4th, 2009 - 30 Comments
Filed under: Credit Cards, Debt Reduction, Mortgages
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About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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30 Responses to “Is FreeCreditReport.com a Scam?”
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May 4th, 2009 at 8:44 am
Great walkthrough! I agree that, although not a “scam,” they certainly are marketing towards people whom have a high chance of forgetting to cancel.
Is that their fault? Of course not. Obviously the consumer maintains the blame. However, they get the reputation they deserve when they go fishing like this.
May 4th, 2009 at 10:38 am
FICO 822
However, “beating you” is not the point. Having a high FICO Score is it’s own reward. My new bank in western North Carolina (where I’m moving to retire) agreed to give me a Construction Loan for $750K and, after the house is completed, convert it to 2 permanent loans to keep in their own portfolio. This is very unusual, and is entirely based on my FICO score and a few other details. This way I avoid a Jumbo Loan, get great rates and avoid Private Mortgage Insurance, additional fees, etc. In addition, by building now, I get almost 20% more for my money due to lower material and labor costs. I love it when a 40-year plan works! ; )
May 4th, 2009 at 4:55 pm
If you want a truly free, no-strings credit score, get it at CreditKarma.com, which uses the same algorithms that the credit reporting agencies use to generate the FICO number and there isn’t any trial to cancel. They also tell you what you would need to do if you wanted to raise your score.
But, I personally prefer Dave Ramsey’s FICO stance:
http://www.daveramsey.com/etc/.....temId=7933
May 4th, 2009 at 5:44 pm
Wayne: I’ve reviewed Credit Karma in the past, and think that it’s a great service. However, it’s inaccurate to say that they use the same algorithms as the credit reporting agencies. Those algorithms are actually tightly protected trade secrets. Moreover, I just updated my score with Credit Karma and it was off by about 30 points.
As for Ramsey’s stance re: worshiping at the altar of the FICO score, it’s incredibly shortsighted to ignore your credit score, and it borders on reckless for “guru” like Dave to encourage his follower to do so. No, you shouldn’t make stupid choices in the interest of raising your credit score, but you also shouldn’t pretend that it doesn’t matter. Whether you like it or not, your credit score does matter, and for things that go far beyond your ability to borrow.
May 4th, 2009 at 6:50 pm
Dave doesn’t even pretend that FICO score doesn’t matter. He acknowledges that he probably pays a little bit more for insurance every year because insurance companies might rely on the FICO score too much. The greater message, and the message that high-net-worth people apparently agree with, is that borrowing money to raise your credit score is a poor use of your time.
Read The Millionaire Next Door or The Millionaire Mind and see if you can find reference to the financially independent folks surveyed ever caring what their credit score is. The truth is, pretending that a good credit score is the secret to becoming wealthy is bad advice. Most of the credit score optimizers would like to see their FICO increase as if its a measure of their success.
By Dave recommending not caring about your FICO score, he’s jarring awake those who are acting as if all of the debt they are incurring and treading water in for the sake of a number. Instead, he points them to far more efficient uses of their time, like spending less, saving and investing more, and working harder. Those are the choices that seem to make the big difference.
May 4th, 2009 at 10:31 pm
Wayne: As I alluded to in my initial response, I couldn’t agree with you more that taking “incurring debt for the sake of a number” is stupid. I also agree that “pretending that a good credit score is the secret to becoming wealthy is bad advice.” I have to admit, however, that it’s unclear who you’re arguing against here… I have yet to hear any reputable financial expert to profess these things to be true. Regardless, if given the choice between a high and low credit score, I’d choose the high one.
May 4th, 2009 at 11:10 pm
Sorry for being unclear. I was initially asserting that, for me, the FICO score is not important enough to track, per Dave Ramsey.
And in response to your statement that any financial guru who advises his followers to ignore the credit score is almost reckless, I posited that Dave’s intention probably is to make a bold statement that flies in the face of what passes for common knowledge about why someone should maintain their credit score.
Yeah, I’d take a higher score, too. But, Dave wasn’t referring to someone passively observing, “Oh, my credit score is high… Lucky me!” That’s obviously not the target audience when he refers to the practice of worshiping at the altar of FICO. If you’re living a debt-free life, the potential non-lending difference of a low FICO score is just immaterial.
Honestly, if you want lower premiums on your property insurance, you can negotiate a better deal regardless of what your credit score is. Point your agent to your claim history, safety provisions, household income, neighborhood, etc. I think I just read something about haggling recently.
May 4th, 2009 at 11:22 pm
Wayne –
Its not the agent that makes pricing decisions on insurance policies. The quoted premiums are at the mercy of the underwriting department. Good luck convincing them to deviate from their system!
May 5th, 2009 at 8:33 am
Agents have a lot more authority than you realize. Like any salesman, they like to have their hands artificially tied by an invisible “guy in the back,” but they are a great advocate for the customer.
It’s commonly known that you should shop around for better premiums every couple of years due to how fast the landscape changes. Because of that, many agents will do a lot to write your policies.
Everything’s negotiable, even insurance.
May 5th, 2009 at 5:50 pm
Ramsey is trying to get famous taking the anti-credit score stance, when in reality no one really cares about it unless their score is bad.
May 6th, 2009 at 7:47 pm
There is also annualcreditreport.com – now that the 3 credit reporting companies have to allow one free report (from each) per year, this is a way to get the report without paying anything – although each of the individual report companies will charge you a nominal fee (usually around $8) to get your FICO credit score.
I typically do one from each of the companies over the course of a year (once every 4 months) to keep track of my credit score and check for any usual activity. The trick is to keep track of which company you use at each time – if you order more than one from them per year, they will charge.
Happy credit!
May 6th, 2009 at 8:25 pm
Joanna: Yes, annualcreditreport.com is the real deal, with no strings attached. In fact, I mentioned it in my article above. Rotating through the different bureaus is a great strategy — I do that myself. The downside is that it doesn’t provide you with access to your credit score. For that, you’ll either have to pay or use one of these free trials.
June 8th, 2009 at 11:25 am
Scam? No
Purposefully misleading? Yes
Bad idea? Yes
June 9th, 2009 at 7:32 am
[...] is not referring to those annoying singing dudes. They are actually paid actors for a company that jumped on the bandwagon and seem to be [...]
June 13th, 2009 at 12:18 pm
Thank you so much for this information. I have always been very mindful of my finances and pride myself with my very nice credit score of 728. Although not as nice as you and your wife’s. But, I give myself a little handicap for being a single mom for 16 years, supporting two teenagers, no child support and no degree (but still a goal of mine). I (just yesterday) was notified that I will be losing my job due to downsizing and am scared to death, with this economy, that I will lose everything I’ve worked so hard for. I do have debt I need to remove but wonder if bankruptcy is a better option for me. If I had no credit card debt I feel I can sustain myself even on unemployment, but am truly worried.
June 15th, 2009 at 7:42 am
[...] http://www.fivecentnickel.com/.....om-a-scam/ Possibly related posts: (automatically generated)Free Credit Report Scam (ishness)Check Your Credit ReportExperian Credit Report + Free ScoreHigh Credit Score Increases Likelihood of ID Theft, Experian Says [...]
September 23rd, 2009 at 7:59 pm
I just cancelled my subscription after noticing that the 14.99 jumped to 24.99. I inquired and they said that I had ordered a detailed report online. I 100% did not do this. I did click the link to do this – and it takes you to a second page that you have to check and click through – two steps I would remember doing. The service rep insisted that I was just being forgetful. Uh. No. DO NOT use this service people. It is a horrible scam! Hidden charges abound!
October 15th, 2009 at 5:51 pm
I don’t understand why one should automatically(mandatorily) get signed on while getting their free credit report. If subscription is automatic, why not unsubscribe automatically on the 7th day?? Obviously they cash in on the fact that many will forget to cancel. A clear case of “bad faith”.
October 24th, 2009 at 3:59 pm
The author of this article and all the responders so far are missing the “BIG PICTURE”…as usual.
What is a big scam, is the credit reports/scores in the first place. Why don’t we finally realize that the system is obviously only a way to “keep an eye” on us and force is to do or not do things.
Isn’t it ridiculous in the first place that we can not have access to our own information?
That is like not being able to know about our health files, school grades, etc.
Why can’t people see anything beyond their own noses?
Identity theft is another bank invention to keep us in line and in fear constantly.
If it is such a big problem, why not give everyone an account number and access to the scores, reports and info 24/7?
That would take care of ID theft in a second, but they don’t want that to happen, because fear is one more control tool.
Don’t ever use credit, pay cash and only buy what you can afford and you will never have to worry or care about your credit score.
Wake up people!
October 29th, 2009 at 12:22 pm
I used this service and was horrified to find that my credit is in the 400-450 range. After some digging around I found out that someone had been using my credit to buy scale model replicas of whale genitalia! It turns out that the guy who was ripping me off was also a convicted arsonist and morbidly obese to the point of immobility! When the police led a strike team into his “Den of Debauchery” (a squalid studio apartment 300 feet below a haunted waterpark), I volunteered to be the pointman. After a lengthy climb down some cargo netting, I kicked down the fat man’s door. Zounds! In front of me was the fat man, leaning back in his motorized scooter, rubbing together his corpulent claws in satisfaction.
He wore a toga made out of soiled bed sheets and wore on his head a paper crown from a BK big kids meal.
“I’ve been expecting you,” He said, in a garbled voice that seemed choked by fat.
“Now…to battle.”
Now his scooter made a low whirring noise, and a klaxon sounded from the wall. A hidden compartment opened up on the scooter’s backside and four spindly metallic legs sprung out. The legs lifted up the fat man as he let loose a guttural chuckle.
Two vulcan cannons emerged from the sides of the scooter and opened fire. I sprung from my crouch and rolled to evade the 20 mm. AP rounds that rocketed from the twin barrels. A second after I had moved the loveseat behind me was ripped apart from the fire. Luckily the fat man was a bad shot.
I was now up and running at full speed and I hurdled over an end table and took aim with my Pancor Jackhammer. I pulled the trigger three times and three 12 gauge shells flew from the barrel with explosive force and met their target. The fat mans face. The lead tore through his soft flesh, blowing brain matter and bits of fragmented bone everywhere. It made sense that the arterial spray was so massive, he was a large man. The mechanical legs buckled and the scooter fell on it’s side. I had won.
Later, I was recognized for my achievment and was awarded the congressional medal of honor. Barack Obama shook my hand and Nancy Pelosi offered me a number of sexual favors that I could take advantage of any time.
It was a good arbor day.
December 15th, 2009 at 4:07 am
Its kind of amusing that this whole article looks like an advertisement for a very dishonest and very unethical website that is designed to trick and scam people into not only getting a credit report that is not free at all but to continue to charge you for the privilege of looking at your own information. Its comical at best that scams like this exist and even more comical that the whole credit report scam exists. carefully guarded trade secrets. LOL Thats how they calculate your secret score. Is that like the 11 secret herbs and spices at that horrid chicken place or is this similar to Mc Donalds 100%all beef (TM) ….. One would hope that people can see this sort of rubbish for them selves but if they could then they would lobby to abolish corporate run credit agency’s.
January 11th, 2010 at 11:34 pm
It may not be a scam to use but THEY ARE sending scam emails to people to get them to sign up on their site. – Please do not tell me it is not them that is doing it because they are the only ones that are benefiting because of the scam emails. I have been looking for a job for almost 3 months and by now would take almost anything and almost fell into their scam. They have been found guilty of scaming before and have had to pay a fine. They are guilty and I would reconsider endorsing this company. If you are thinking about using them – search it out first. There are legit companies out there – use them.
February 1st, 2010 at 9:28 pm
SCAM! I had the exact same experience as Ed above described. I supposedly signed up for the report from all three credit reporting agencies knowing it would cost 24.99, however I was totally unaware of this charge. Just like Ed above, the customer service rep and a “manager” claimed that I’d been informed of the extra charge before clicking to get the reports. I do not recall being informed in any way that I would be charged this fee for the three reports. I believe the website is intentionally deceptive! If they did disclose the fee, it was buried somewhere any average user would not notice.
February 5th, 2010 at 7:31 pm
I think this sums it up, thanks Doug:
Scam? No
Purposefully misleading? Yes
Bad idea? Yes
DON’T USE THIS SERVICE!!!! YOU WILL GET BURNED. BESIDES, THERE’S A REAL FREE SERVICE: AnnualCreditReport.com, which my bank actually recommended.
March 7th, 2010 at 3:22 pm
Ed, Katie…same thing happened to me! I just got off the phone with the sales rep who used the same crappy jargon with me too. Will never use again!
March 12th, 2010 at 11:17 am
Jumping on the Ed-Katie-Michele bandwagon here. I too was charged 24.95 (which came to 27.16 due to taxes) despite canceling my membership that same day. When I called to inquire the rep stated it was a fee for ordering an additional detailed report from all 3 credit agencies. I was wary about hidden fees from the start, and would not have agreed to any charges beyond the initial membership fee while navigating the website. IF the fee actually was disclosed beforehand, it was definitely done in an underhanded way.
Stick with annualcreditreport.com!
March 16th, 2010 at 2:29 pm
The 3-in-1 report sales pitch is also misleading. When you subscribe, find errors and try to fix them – you can’t. You then have to contact each credit agency directly, subcribe to their report and work through the maze of steps to get the changes made. Clearly they have no incentive to report accurate information or make any changes in a timely fashion. They all mislead by careful ‘word-play’ and provide no real benefit.
Fortunately, things are changing due to their corrupt and misleading practices.
June 11th, 2010 at 9:50 am
They obtained my new credit card number through Experian and charged me their $14.95 membership without my approval. SCAM!
June 14th, 2010 at 11:55 pm
SCAM: Cancelled within 3 days and was charged $24.95 for some reason.
June 21st, 2010 at 9:57 pm
As far as I am concerned it is a scam. You cannot get all the info from the credit reports from creditreport.com First they only work with experian unless you pay a second fee which was not announced before paying the first fee. Second, if you ever want to dispute a claim you will not be able to find the account numbers of the so called debts, and thus they do not deliver you the whole credit report as advertised. It’s a scam all the way around. They make it painfully hard to cancel your account. You have to sit on the phone with some halfwitted clown and tell them about 20 times that you want your account closed, while they proceed to try to convince you to stay. By the time your done on the phone you feel like you’ve been mind-raped. freecreditreport.com can suck my fat ones.