How to Order Free Credit Reports

July 16, 2007 — -- This week Consumer Reports came out with a study showing that dozens of Web sites 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 upfront that the real government Web site where you can get your free report is www.annualcreditreport.com.

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 because of fraud.