Posted by Elisabeth Leamy, Fri Jul 13 2007, 09:10pm

This week Consumer Reports came out with a study showing that dozens of websites are advertising "free credit reports," but then trying to lure consumers to spend money on a bunch of unnecessary credit-related services

This week Consumer Reports came out with a study showing that dozens of websites are advertising "free credit reports," but then trying to lure consumers to spend money on a bunch of unnecessary credit-related services. It's a development that could sidetrack American consumers from getting the free credit report Congress guaranteed them. So let me state right up front that the REAL government website where you can get your free report is

Half of all credit reports contain negative information that is not true. Your task is to make sure you're not in that half! The first time I ordered my credit reports, they were loaded with errors. For example, the same credit card was listed three different times so it looked like I had three times as much debt as I really did. One report claimed I had worked at Sears. Not true! Many employers now check credit reports. Was it going to look like I was hiding a bad job experience by leaving it off my resume? I filled out dispute forms and got the credit bureaus to correct my record. Then, when I ordered my reports again a year later, some of the same errors resurfaced. Aaargh!

Banks, credit card companies and landlords have long used credit reports to get a sense of a person's reliability. Now, employers and insurance companies are using credit reports more and more too. So it's important that you know what's in that report. You get to see what businesses are saying about you, plus which businesses have asked about you. I recommend reviewing your credit reports at least once a year and especially before any big purchase.

In addition to the annual freebies, you're entitled to a free credit report any time you're turned down for credit. The institution that told you "no" is required to list the reason for your rejection plus the name of the credit bureau it used. You then have 60 days to request your free report. You can also qualify for a free report if you are on welfare, if you're unemployed but about to launch a job hunt, or if you believe your credit report is inaccurate due to fraud.

If you find mistakes on your credit report, you should dispute them. Simply fill out the dispute form provided by the credit bureau. If you want the bureau to know that you've never worked at Sears, you just say so. If you're trying to prove a bigger point like you never made a late payment on your credit card-- you should try to provide documentation. If you don't have documentation, but you know you're right, try disputing it anyway. The credit bureau has thirty days to research your claim and get back to you. And it's required by law to do so. If your credit record changes as a result of your dispute, you can ask the credit bureau to send a fresh copy to any business that has received an inaccurate report about you in the past six months.

If the credit bureau says you haven't made your case, and refuses to change your report, you can write a dispute letter and have it placed in your file. You can also write a letter if you agree with entries in your report but want to explain the circumstances. For example, maybe you got behind on your bills because of a serious illness. Future businesses that pull your report will be able to see your letter and take it into account.

If there are unflattering entries in your credit report, and they're true, time is the only remedy. After seven years, the credit bureaus are required to stop reporting late payments, or other adverse information. Lawsuits and judgments last seven years or until the statute of limitations runs out. If you've declared bankruptcy, that will remain in your record for ten tough years.

As for the commercial services the credit bureaus will try to sell you, some are useful, others less so. For example, for about $8 you can get a copy of your credit score, which is a number based on the items in your credit report. That can be very useful before trying to take out a loan.

On the other hand, some sites charge $150 a year for credit monitoring, which is advertised as an identity theft protection. Instead, consider some free alternatives. Since you're entitled to a free report from each of the big 3 credit bureaus, you can stagger them and basically monitor your credit year-round. Order from one of the credit bureaus every 4 months. If you find problems, some states allow you to freeze your credit so that nobody can open new accounts in your name without contacting you first.


1. Order one of your free credit reports every 4 months by going to

2. If you're about to make a big purchase, you may want to pay for a report by going to, or

3. Dispute inaccurate entries swiftly and thoroughly.

4. If necessary, write a succinct letter to be placed in your file to explain your side of the situation.

5. Consider ordering your credit score.

6. Look for free alternatives to expensive credit services.