Free Yearly Credit Report - Is It Really Free?

Reader Question: I have read that I am entitled to a free yearly credit report from the companies who produce them. But I've also seen a lot of people charging for this stuff. Who produces these reports, and who do I contact to get a yearly credit report that is truly free?

You're not alone with this question. You'd be surprised by how often people ask about this. In fact, we just answered a nearly identical question about a week ago, so I recommend reading that one as well.

In the previous Q&A session (hyperlinked above), I explained why some websites offer free credit reports but then charge for add-on services. So in this response, let me focus on the core question you are asking -- who produces these reports and where you can go to get your free yearly credit reports online:

There are three credit-reporting companies in the United States. They are TransUnion, Equifax and Experian (formerly known as TRW). The Fair Credit Reporting Act (FCRA) is a federal law that governs the way consumer data can be gathered and distributed. In 2003, the law was updated with some new provisions. One of the items added under section 612 was the following clause about free yearly credit reports for consumers:

All consumer reporting agencies ... shall make all disclosures pursuant to section 609 once during any 12-month period upon request of the consumer and without charge to the consumer.

Or, to state it in plain English, consumers have the right to request their credit information once a year without being charged for it.

The revised law also called for a "centralized source" where consumers can go to request their free yearly credit reports -- and that source is the website located at www.AnnualCreditReport.com. The website is incredibly easy to use, so you should have no trouble finding your way through it. From the home page, just look for the button right in the middle that says "Request Report" or "Start Here."


Image: Where to get your annual credit report for no charge whatsoever.

If you would rather request your free yearly report by mail, you can do that as well. A mailing address is provided on the website mentioned above. Now let's move on to another important question that piggybacks on this one...

What to Do With Your Yearly Reports

The first thing you need to realize is that your reports will not come with a credit score. That's a separate thing entirely, which confuses a lot of people. I have yet to find a website where you could get your credit score for free without making a purchase of some kind. But there are some legitimate websites where you can all of this information at once (reports, scores and more). Your score is another important piece of the puzzle, because that's what lenders will use when considering you for a loan.

But let's get back to the free yearly credit reports and what you should look for when you receive them. Basically, you are looking for any kind of errors or inaccuracies. Such mistakes could affect your score in a negative way, and they could also be a sign of fraud. For example, if you see a line of credit that's not yours (like a credit card or a loan), then it's one of two things -- an innocent data mix-up, or a case of identity theft. Either way, it's something you need to resolve. Here's some information on how to dispute such errors.

Of course, the only way you can spot these things is by being proactive. So if you haven't yet done so, request copies of your free yearly reports through the website mentioned earlier.

I hope this answers your question, and I wish you financial success in your life.