On Investing: Some things you should know about your credit score
Sat, February 14th, 2009I'm sure that most of us have seen and heard those commercials of the "dot com" company offering you copies of your credit reports for free.
I get just a bit suspicious, though, wondering how anyone can give something away for free and yet manage to pay for all that air time (as well as paying the marketing genius who came up with those catchy tunes and lyrics).
How can a company or service so widely publicized offer us something completely for free and yet pay their bills?
Let's see if there's more to the story.
The Federal Trade Commission, the nation's consumer protection agency, tells us the ONLY authorized online source for you to get a free credit report under federal law is www.annualcreditreport.com
You can also get a free report from each of the three national credit reporting companies every 12 months.
Some other sites claim to offer "free" credit reports, but may charge you for another product if you accept a "free" report.
If you order your "free" credit report from the website of the company with the "As seen on TV" ads, you are informed of the following disclosure: "When you order your free report here, you will begin your free trial membership in Triple AdvantageSM 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."
Well, that offer doesn't sound exactly F-R-E-E to me after all, but thanks just the same for that silly song that sticks in my head each time I hear it.
Iowa Attorney General Tom Miller strongly encourages Iowa consumers to request copies of their credit reports from the website www.annualcreditreport.com.
As of March 1, 2005, copies of credit reports are now free to Iowans as required by law.
"This is better than a free lunch," Miller said in a 2005 interview. "I hope every Iowa consumer takes advantage of this new opportunity."
A new federal law kicked in as of 2005, entitling Iowa consumers to get up to one free copy per year of their credit report from each of the three big consumer reporting companies: Trans Union, Experian, and Equifax.
Miller says that when we go to the site www.annualcreditreport.com, we can order one, two, or all three credit reports. Consumers may also call toll-free to 877-322-8228, or write to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Georgia 30348-5281.
"This makes complete sense," Miller said. "First: It's your information. You should study what the companies are reporting about you to creditors, insurers, employers and others who are reading your credit report.
"Second, you may well catch mistakes, and you can get them corrected.
"Third, reviewing your report is an excellent way to be sure no one has stolen your identity; by taking your name and Social Security number to open an account, for example.
And, finally, it's free. Prior to March 1, 2005 credit reports cost Iowans about $9.50 apiece, (unless you were denied credit or were an identity theft victim.) Now we can get one credit report per year from each company for free."
"Checking your credit report is an excellent way to scan for unfamiliar credit card accounts or other signs of identity theft," Miller said. "This is a very valuable tool."
You may have also heard lenders referring to your FICO score. This score is a specific type of credit report score that is widely used by most lenders to determine whether to lend money and at what interest rate.
There are five important components that make up a FICO score: payment history, total amounts owed, length of credit history, new credit and types of credit used. The weight of each component is displayed in the chart.
Information contained in a person's credit report is used to calculate the FICO score, so it is advisable that you request a copy of your credit report and check the information for accuracy before applying for any type of loan or credit.
Simply checking your own credit report won't improve or lower your credit score by itself. However, if you do find questionable accounts or other mistakes on your credit reports, such as incorrect addresses or other errors, federal law gives you rights for disputing errors and making corrections.
You can learn more about building a better credit report, credit repair, filing a complaint about a company offering a free report that wasn't free and more at www.ftc.gov or www.state.ia.us/government/ag/index.html.
If only the Federal Trade Commission or Iowa Attorney General had thought up a marketing campaign and a silly song first!
Products offered through IBA Securities, a division of Broker Dealer Financial Services Corp., Member FINRA & SIPC.
Not FDIC insured, no bank guarantee and principal may lose value. Investment Advisor Representative of Investment Advisors Corp., a Registered Investment Advisor.
Brian is a commission-based Registered Representative, as well as a fee-based Investment Advisor Representative with over 25 years of industry experience.
Brian can be reached at Bank Iowa Investment Center, (712) 246-1311.
Source: http://www.valleynewstoday.com/
