The other night while watching TV with my daughter she started to sing along with the FreeCreditReport.com song. Pretty catchy, I thought. Smart marketing, too. Unlike many ads which are creative but leave you with no way to remember which company or product they are promoting (just watch TV for 30 minutes and count how many ads actually connect directly with the product), this one uses the name right in the song. So you’ll always remember the website while you are singing. Kind of like the Aflac duck quacking the name of the company.
Okay, so the marketing is well done…the song is easy to remember…and so is the website.
But what about the product?
Is their free credit report really free?
Sadly, free doesn’t always mean free these days. Sometimes it does mean free. But sometimes it means “free but…”. Like “free but…you have to pay for shipping.” Or “free but you must buy something else first.” Or in this case “free but you need to sign up for a monthly service.” I don’t know about you, but to me free should mean “free.”
And when it comes to credit reports or credit repair, there is even more to this story. The average consumer is bombarded with credit card offers. Even if they are not in a good financial position and will only get deeper into debt. Most people have no idea what their credit score is or what it really means. Of course, that doesn’t make the advertisers the bad guys. But it’s hard for some people to weed through the “fluff” to find the answers they need.
On that note, here are some interesting points that the free credit report TV commercials don’t tell you:
1) Like I said earlier, in order to get the free credit report you must sign up for paid credit monitoring service, that is billed monthly. Sure, they say you can cancel at any time. And that is a nice option. But how many people forget to do this? Or think that they actually need to the service? Is monthly credit monitoring a rip-off? No, it can be meaningful, especially if you’ve have trouble with other people stealing your credit cards. But for most people it is simply a service you don’t need.
2) You can get free credit report – for free! The credit bureaus have set up a service at annualcreditreport.com that allows consumers to get one copy of their credit report from each of the 3 credit bureaus each year – for free, with no catches. They have done this to comply with the Fair Credit Reporting Act, and this is the only authorized site. You can get all 3 at once, or spread them out and request a different one every 3-4 months (and in a way, do your own credit monitoring). Also, if you are ever turned down for credit or a loan, you can request a free copy of your credit report to get an idea of why you were turned down.
3) what to do once you get credit report. If you’ve never looked at your credit report, it’s kind of interesting – it shows your payment history, open accounts, closed accounts, balances. It’s a strange feeling seeing your financial life broken down into a bunch of numbers. But once you get past the “cool factor” you need to decide what to do with this information. Frame it? Stick it in a drawer? Toss it in the trash? Nope, none of the above. First, you need to look carefully for errors. Check out your name, account histories and balances, open/closed accounts. And if you find any errors you need to either fill out the dispute form or write a letter requesting that the errors be corrected. Then…
4) You CAN get bad credit removed. I know, the “experts” tell you that you have to wait 7 years for bad credit to fall off your report. Technically, that’s correct. But you can do a little more to speed up the process. And you can do it legally and ethically. What is this strategy? Ask the creditors to provide you with written verification that the item is correct. And if they can’t, then they must delete it. Don’t lie. Don’t give any excuses. Just ask for written verification. In most cases, they won’t do this and they’ll remove the bad credit. Again, there’s nothing unethical about this, you are just asking for proof.
5) How to avoid future credit problems. A colleague of mine used to say “credit cards don’t come with instructions on how to use them responsibly”. How true! All you need to do is apply for a card, and if your numbers fit you’ll get credit. For many people this is not a problem. But some people use credit cards as if they were cash. And figure they’ll pay off the charge when the bill comes … and then don’t. And you know what happens next – you carry a balance, get charged interest, and the balance grows. And the same happens next month, and before you know it your debt gets out of control. Then you miss a payment here, miss another payment there, and your credit score falls like a rock falling off a cliff!
That’s not to say that you shouldn’t use this product. For some people, it just might be the right solution. But the takeaway point to remember is that a catchy song, a flashy ad, or a memorable marketing campaign don’t always mean that the product is right for you. And it doesn’t always tell the entire story.
So, next time you hear the catchy free credit report song, realize that “free” isn’t always as good as it sounds.
Kris Bickell shares the financial tips he learned the hard way at Debt-Tips.com. Whether you need help getting out of debt, fixing your credit problems, or saving money, you’ll get honest answers to hep you become debt free.