Understanding Free Credit Score Services
There are two types of free credit score companies. There are the credit bureaus, and there are companies that offer you a look at your credit score by running a soft search on your credit. It is highly advisable that you do not go directly to credit bureaus. In this article, you will come to understand how free credit score services work, and which path you should take if you wish to look at your credit rating/credit score and your credit history. This article explains all about how you get free credit score services from credit bureaus (not recommended), and how you get free credit score services from credit companies (recommended in some cases).
Important Point About Free Credit Score Services That You Need To Know
I know that most people skim read online articles, so I am going to get to the most important point right away and then explain the details throughout the rest of this article.
When a credit scoring company or credit scoring bureau says you can get a free credit report or anything of that nature, then they are legally allowed to say the word “FREE” in the strictest interpretation of the law. But, it is my contention that such credit reports are very rarely completely free.
When most people claim their free credit report from one of the credit bureaus, they end up paying money for it. In short, they end up paying money for it because they are forced to take a free trial subscription in order to get their free credit report. The subscription requires a credit card to sign up, and the subscription is so difficult to get out of that most free accounts end up rolling over into a paid subscription. All of this, and more, will be explained throughout this article.
Each Country Has Its Own Credit Scoring Bureaus
Credit scoring bureaus are not branches of the government. They are profit making companies. They keep track of your financial history and generate a score that represents how creditworthy you are. The higher your credit score/credit rating, then the more creditworthy you are.
Credit bureaus take part of their information from publicly available information about you, such as the address from which you pay your taxes, and your registered information on the electoral roll. Other information they receive directly from credit companies, banks, credit unions, utilities and so forth. All of these companies give information to credit bureaus of their own free will. Then, whenever a creditor wants to know how creditworthy you are, they may use the credit bureaus.
It is completely up to the company or bank which credit bureaus they submit information to. For example, a High Street bank may submit your credit history to all of the current credit bureaus. Whereas a second-chance prepaid card company may submit no information at all to any of the credit bureaus.
The USA Has Three Credit Scoring Bureaus
There is Equifax, Experian, and TransUnion. These are the three credit bureaus that banks and credit companies report to. Banks, credit unions, credit companies, utilities, and many more are routinely sending information to one or more of these credit bureaus.
You are able to get a free credit report from any of these three credit bureaus. You are entitled to one free credit report from each of them on an annual basis. Plus, if you are refused credit, then the company that refused you has to tell you which credit report they read in order to come up with your refusal. Using this information, you are able to request the very same credit report from the credit bureau, and you are legally entitled to that credit report for free.
However, despite the fact that you are entitled to these credit reports for free, you should not go to the credit bureaus for them. There are better ways to get your credit report.
Here Is The Biggest Reason Why You Should Not Go Directly To Credit Scoring Bureaus
Equifax, Experian, and TransUnion say you are allowed a free credit report every year. They say this because you are legally allowed a credit report for every year for free. However, Equifax, Experian, and TransUnion tell you that you have to sign up for a free trial in order to get your free credit report.
In other words, if you want your free credit report from any of the three credit scoring agencies, then you have to sign up for a free trial account with one of them. In order to get your free trial, you need to give them your credit card information. If you do not, then they will not give you an account, and you will not get your free trial or your free credit report.
You are given a free trial for a limited amount of time. During that time, you have to cancel your free trial account. If you do not cancel your free trial account during the time it is running, then you have to pay for your account.
In other words, you are given a free trial that rolls over into a paid account. During the free period, it is up to you to cancel and quit your account. If you do not cancel or quit your account before the free trial is ended, then a monthly fee is drawn from your credit card or your bank account until your account is canceled.
The only way to shut down your account is to call the customer service department. This is true for all three credit bureaus. The only way to cancel your accommodate is to call the customer service department, and getting through to them is a nightmare. You will be left on hold for an overly long time, and then you have to convince the customer support worker that you want to quit your account. The customer support worker is given incentives to keep your account open, so he or she will give you numerous reasons why you should keep your account open. Once you finally get the customer support worker to close your account, then you need to check back with your account after a few days because if your customer support worker has lost a lot of accounts recently, then he or she may not close your account, which means you then have to do the whole thing again.
You Have A Right To Free Credit Reports But You Still Shouldn’t Get Them From Credit Scoring Bureaus
The free trial game that the credit bureaus play is not worth your time. Getting out of their free trial is a nightmare, and there are plenty of online user reviews showing people who have tried and failed to get out of their free trial and have ended up having to pay a subscription fee.
There are three options when it comes to getting a credit report. You may get a credit report from Experian, since Experian is better than TransUnion and Equifax. Your second option is to use a company such as Credit Karma or CreditSesame for their free credit score services. Your third option is to forget about getting a credit report and conduct your business without it.
Option 1 – An Intermediate Company Such As CreditSesame Or CreditKarma
I know there are other intermediate companies around the world, such as Noddle, but I mention Credit Karma and CreditSesame because they are popular and moderately trusted in the USA.
These are companies where you have to sign up and give them a few details. After that, they will give you a free credit report showing your credit score/credit rating, and they give you a fair portion of your credit history and other details. The things they show you are the things that creditors see when they run a soft search on your credit. It gives you a very good idea of your creditworthiness.
Option 2 – Experian
There are very few reasons why you should need a report from a credit bureau. If you are simply interested in your rating/score, then you are better off not knowing. Or, you could use an intermediate company such as CreditSesame or Credit Karma for free credit score services.
If you need a credit report for something such as going bankrupt, then Experian is the one you should go to. I explain later in more detail, but long-story-short, TransUnion and Equifax have been fined and Equifax has been hacked, leaving Experian as the lesser of those three evils.
Option 3 – Do Not Get A Credit Report And Forget All About It
If you sign up with a credit bureau, then you are going to have a hard time getting out of your subscription. People have been known to cancel their credit cards and their linked bank accounts simply to get out of their subscriptions.
On the other hand, if you go with free credit score services such as Credit Karma or CreditSesame, or other intermediate companies, then your email address, phone number and address will be sold to spammers. This is true of every single intermediate company we have ever tested.
There are downsides to any method you choose when searching for your credit report. That is why I suggest that you do not get one at all. If you are worried you will be rejected for something such as a mortgage, then run a soft search with your mortgage company and see what they say. If you are looking to improve your credit rating, then do it organically by paying of debt, keeping up your payments, and handling your money correctly. Additionally, if you are simply curious, then get curious about something else. No matter which method you choose to get your credit report, there is always a downside.
Here Are Two Other Very Good Reasons Why You Should Not Go Directly To Credit Scoring Bureaus
I am not a fan of Experian because they pull that free trial deal that the Equifax and TransUnion pull. Yet, at the moment, Experian is the only one out of the credit bureaus that you can trust (using the word “trust” loosely in my opinion). Equifax has been hacked and TransUnion has been fined for inappropriate business practices.
Equifax had a devastating hack in 2017. As a result, the financial and personal information of their customers was exposed and we still have no idea what happened to it. What is worse is that there is no genuine effort being made to find out the repercussions. For example, there is no large-scale investigation into how many people have had their identity stolen or their accounts compromised as a direct result of the Equifax hack.
Here is a link to an article about Equifax and the aftermath of the hack.
TransUnion is no better than Equifax in terms of reputation. Both Equifax and TransUnion have been fined for inappropriate business practices. This is a link to the article all about TransUnion and Equifax being fined $23 million. A government regulatory body found that both TransUnion and Equifax have been deceiving people about their credit ratings and credit repair.
If You Must Go To A Credit Bureau, Then Go To Experian
Remember the downside to using a credit bureau. You will have to use their free trial and then get out of the free trial so you are not charged for your subscription. Plus, even though Experian is the best of a bad bunch at the moment…it may not stay that way. Strongly consider simply not seeking out your credit rating. You can live without it.
There Are Other Ways To Access Free Credit Score Services
You may use an intermediate company such as Credit Karma or CreditSesame for free credit score services. There are other companies such as these all over the world, and these two are the most popular in the USA.
Sign up for a free account, give them a few details, and they run a soft search on your credit and show you the results. You do not have to give them any of your bank account details or your credit card details, so there threat of them charging you for accounts you don’t want.
Why Do Other Companies Offer Free Credit Score Services?
The credit bureaus have such a negative online reputation that companies such as Credit Karma and CreditSesame were inevitable. Instead of making money through subscriptions, these intermediate companies make money through adverts.
What Is The Catch When Other Companies Offer Free Credit Score Services?
The catch is that intermediate companies are trying to sell you lending services. The intermediate companies are paid money if you click an advert and if you create an account after clicking their adverts. Plus, the intermediate companies match you with affiliate lenders.
Companies such as Credit Karma or CreditSesame sign a bunch of deals with lenders. Your credit score and credit history is used to match you with suitable lenders. It is a little like using a comparison website that is tailored to people with your credit score. If you take up any form of lending as a result of what you click on the intermediate website, then the intermediate company/website is paid. That is who they make their money, they are trying to sell you lending services.
The Biggest Downside To Using Credit Companies And Other Companies For Free Credit Score Services
Your email address will end up in the hands of spammers. Every intermediate company we have ever reviewed has resulted in us receiving spam emails. Maybe the intermediate companies are selling the emails to spammers, or maybe the affiliate lenders are selling the email addresses.
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Some intermediate companies also sell phone numbers and addresses too. You are going to receive junk mail, cold calls, and spam emails if you use an intermediate company for your free credit score services. As I have mentioned already, there is a downside to every method for getting free credit score services.