The word free, as defined by Wikipedia, means obtained without payment. The problem in the world of credit reports is that the word has been redefined as “conditionally free.” Many of the free credit report offers – well, all of them – require you to enter a credit card number and sign up for a subscription service that would monitor your credit reports for suspicious and potentially fraudulent activity.
Now, there are certainly good things about these services. But, they are not free. You could make a very strong argument that exchanging a free credit report for a trial subscription to a fee-based credit monitoring service doesn’t really fit the “obtained without payment” definition of the term. And while scholars will argue back and forth these fine points about free or not free credit reports, the Federal Trade Commission has no ambiguity on the subject.
On October 7, 2009, the Federal Trade Commission, the government body that enforces the free credit report laws, announced that they would seek public comments on proposed changes to the free credit report laws, often referred to as the “Free Credit Report Rule.” This is less than a year after the FTC released several video clips parodying the freecreditreport.com television spots where out-of-luck twenty somethings are living in their parents’ basements or working in fast food restaurants because of trouble with their credit, which most credit experts agree are gross exaggerations of the downside to being a victim of identity theft.
The proposed new rules would help to clean up some of the confusing marketing of “free—in exchange for trial subscriptions—credit reports. For example, any television, print, radio or Internet ads where a free credit report is being offered, the new rules would require disclosures that clearly state that “This is not the free credit report provided for by federal law.” Now, this won’t completely prevent people from signing up for a subscription service in exchange for a “free” credit report, but it will provide another level of protection for people who really truly wanted to get their free credit reports.
It will also do a good job to further educate consumers that they do, in fact, have the right to free credit reports every year. And, ironically, these services that bury us with advertisements for free credit reports and free scores will help serve the public by having to display the message that consumers are entitled to free credit reports. To learn more about the proposed changes to the free credit report law, you can go to the FTC website and search for “Comment on free credit reports.”
John Ulzheimer – Credit scoring and credit reporting expert and author, John is the President of Consumer Education for Credit.com. Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on CreditBloggers.com.
John Ulzheimer Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on Credit.com News & Advice.
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Hi John! You write that *all* free credit report offers require you to enter a credit card number and sign up for a subscription service. That’s not true! At Quizzle.com, we don’t require a credit card number when you sign up because the free credit report and free credit score we give you is really and truly free. Give it a try – You’ll find that Quizzle is the exception in the world of “free” credit report websites. When we say “free,” we really mean it.
Ah, the Quizzle argument. Very enthusiastic. I’m almost insulted that you suggest I “give it a try” considering what I do for a living as if I haven’t. The reality is that I have used Quizzle. Not bad but since you bring it up here are some suggestions…
First, “Free” in my mind means without any sort of obligations or exposure to on-site marketing. Quizzle can’t make that claim. Remember, “$7 gets you a new, updated credit report and score.”
Second, your *free* score is a fake score masked to look like a FICO score. Why did you choose 350-850 as your score range when you could have chosen A-Z, 1-100, or any other scale? You lose serious points for that in my eyes.
Third, your model interprets HELOCs as credit cards, which is like missing the “what is your name” question on the SAT. Bad form if you want to be taken seriously in this space.
All in all it’s yet another, less than spectacular, way to get one of your credit reports, not all three and certainly not altruistically free as suggested.
One thing the government should do with the real service is to register a new URL for it that ends in .gov. Only official government entities can get .gov domains, and this should significantly reduce the confusion that the fake services can create.
Happy to answer your questions John!
First, while “free” certainly seems to have a loose definition, as your post shows, I believe free means $0 and absent additional obligations. In this case, Quizzle is absolutely free. Yes, we do offer additional products and services at a low cost, but that’s only *after* a user has received his freebies and they’re 100% optional.
It’s true that we market our various products and services on our site. However, in my humble opinion, if marketing products and services negates the “free” part, then none of us, including Credit.com, could claim to be free. From what our users have told us, “free” means no catches, no trial subscriptions, no credit card cards required – which accurately describes Quizzle.
Second, the free credit score we offer isn’t our own proprietary score, so we didn’t set the scale. Our score is a CE Score from CE Analytics and was designed to give consumers a very strong understanding of how well they’re managing their credit.
Third, as far as the HELOC issue goes – I hear ya! We gather that information from the client’s credit report and often times, the credit category is reported incorrectly. In many cases, it’s not reported accurately on the creditor or lender’s side.
I hope I’ve answered your questions and if you or your readers have any others, fire away!
Yes, I agree…free seems to have taken on a new, less consumer friendly definition and that’s too bad. I appreciate, as I believe most folks do, that your organization has similar objectives to redefine it old school style…kinda like Webster had in mind.
The difference as I see it is Credit.com doesn’t come out and say that we’ve got this free credit report and then offer fee based services to site visitors. We’re very clear about that. Our Credit Report Card, which is free for real, doesn’t really constitute a credit report in my eyes. It’s more of a credit risk interpretation from the eyes of a credit scoring model.
We also try to be very honest with consumers that some scores matter and some don’t. Trust me, I’ve taken my lumps for that one but I still think consumers deserve to see what lenders see. Having said that, I like your score.
It’s about 40 pts different from my real FICO scores, as of today anyway. That’s not a bad proxy considering your trying to model to a secret formula. But the higher and lower scores, the “tails” if you will, are always easier to model. It’s the middle part of the curve that’s difficult, FICO 600-700ish.