FTC mandates disclosure on free credit reports
Obtaining one’s credit report can carry a number of benefits, from spotting incorrect information that can lower a credit score to knowing where a consumer stands in the eyes of lenders.
However, people may be misled by certain advertisements with regard to being able to obtain the credit report. Companies that air these advertisements often claim they offer a free copy of a credit report as an enticement to have people purchase credit monitoring services.
To combat this type of advertisement, a new rule from the Federal Trade Commission came in effect at the beginning of April requiring that companies offering a supposed free credit report disclose the fact that consumers are entitled to one by law. Through the regulations, disclosure statements will have to include a government-supported website that offers reports from the three main credit bureaus.
Consumers can get one free credit report every year from each of the bureaus at www.AnnualCreditReport.com. Experts recommend that people space out getting their credit report, obtaining one every four months.
Getting a credit report can show a person whether their payment history is accurate. Mistakes, including misreported delinquencies or defaults, can make it more difficult for a consumer to gain access to a number of financial products, including insurance, mortgage loans and credit cards.
Information on a credit report can also hurt a person’s chances at getting a job, as some employers use them to determine how risky a potential hire may be. The reasoning behind this is that people who are late on payments or in default may be more likely to steal from a company.
Along with allowing them to correct any inaccurate information, getting a credit report can show a consumer whether they have been the victim of identity theft, as unauthorized accounts opened in their name will appear in the document.
At this point, the FTC’s rule affects websites run by companies that claim to offer free credit reports. However, starting September 1, these organizations will have to include the disclosure in their television and radio advertisements.
What still remains is that consumers have to pay to get a copy of their credit score, which is a number used by lenders to assess the risk involved in granting loans and other forms of credit. However, Colorado Democratic Senator Mark Udall recently introduced a bill that would allow consumers access to their credit score when they obtain a copy of their report.
Similar Posts:
- What Information Should You Include in a Credit Dispute Letter?
- Free Credit Score: Check your credit report score easily
- Free credit score focus of Udall bill
- What Can I See in My Credit Report?
- How Can You View Your Credit File (and How Much Does it Cost)?
