Tuesday, July 1, 2008

Free Credit Score, Credit Monitoring Services

A class action suit settlement gives consumers free access to credit scores, but not the most widely used score which still costs a few bucks to obtain. Still, the settlement also comes with a useful free credit monitoring service. (In another case, to address concerns over missing data, another financial institution is offering customers free daily credit monitoring of all three major credit bureaus.)

by Broderick Perkins
© 2008 DeadlineNews.Com

Deadline Newsroom - There's perhaps nothing more important than your credit report and your credit score when it comes to buying a home.

Lenders scrutinize both before approving -- or rejecting -- your mortgage application.

Before you apply for a mortgage, before you search for a home, you should know what's on your credit report and you should know the score.

That's because you may need to correct errors or make some adjustments to your credit habits to improve your credit, raise your score and increase your chance of landing the mortgage you need.

With a credit monitoring service it's easier to keep tabs on any corrections or changes you may need to make.

Now, both your credit report and your credit score are free -- with a few caveats -- thanks to a recently settled class action suit involving TransUnion. TransUnion, along with Equifax and Experian, is one of the big three credit reporting agencies.

Your credit report is your fiscal fitness report on your credit habits. It names your credit accounts, identifies them by type and tracks balances, credit limits, available credit, open-or-closed status and payments, all to reveal how well or how poorly you pay each account.

The report also documents your applications for credit as well as notices of liens, judgments and other "derogatory" remarks, remarks from the consumer, credit freezes, identity theft actions, dispute notices and other information.

And it contains your legal name, current and recent addresses and place of employment, Social Security number, date of birth, driver's license number, telephone numbers and other identifying information.

All the information on your credit report is also factored heavily into your credit score, a statistical analysis or numerical value placed on your credit behavior. Your credit score is commonly used to nay or yea your requests for credit. The higher the better.

Under the settlement, anyone who has ever had a credit report on file with TransUnion between Jan. 1, 1987, and May 28, 2008, is eligible to receive certain credit score and credit monitoring benefits. That's pretty much anyone with a credit card account or loan during the period -- some 160 million Americans.

The settlement says eligible consumers can select either a free TransUnion six-month credit monitoring service the company normally sells for $59.75 or a nine-month enhanced credit monitoring service that costs $115.50. Both services come with a credit score.

(In another case, to address concerns over missing data, Bank of New York Mellon Shareholder Services is offering customers free daily credit report monitoring of their credit reports from all three major credit bureaus. The service includes email-delivered monitoring alerts of key changes to credit report.)

Under previously existing federal law, "The Fair and Accurate Credit Transactions Act of 2003" you can already get a free credit report three times a year -- one from each of the three major credit reporting agencies (among others) ,Equifax, Experian and TransUnion.

You can also get your credit report by calling, (877) 322-8228 or by writing Annual Credit Report Request Service, PO Box 105283, Atlanta, GA 30348-5283. Call first to determine what information you'll need to send.

If you obtain the free report from one company, say in January, another report from another company in May, and another from the remaining company in September, you've effectively set up your own free monitoring system to keep tabs on what's doing on your credit report.

However, consumer regulatory provisions don't give you a credit score, which will cost you $15 or more.

The new court settlement does include both a credit monitoring service and the TransUnion credit score in the deal, but TransUnion's credit score isn't the more widely used Fair Isaacs Co. (or FICO).

You'll still have to pay for the FICO score and you should.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the new Deadline Newsroom, DeadlineNews.Com's news back shop. In both cases, it's where all the news really hits home.

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1 comment:

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