Every year since 2004 we’ve had the right to a free copy of our credit reports thanks to the FACTA amendment to the Fair Credit Reporting Act. You’d think the take rate of those free credit reports would be impressive, considering just how important our credit is to things like loans, interest rates, insurance premiums, even getting a job. But, you’d be incorrect.
Since FACTA the take rate of free credit reports via the annualcreditreport.com website, the only site authorized to provide FACTA free credit reports, is an abysmal 4%. That means hundreds of millions of free credit reports are going unclaimed each year. They do not roll over, like cell phone minutes.
The reason people do not claim their reports is three fold…
1. They may believe the ads on television or on the Internet ARE their free credit reports. The reality is those reports are being marketed by for-profit companies, including the credit bureaus. They are conditionally free unless you fail to cancel a trial credit monitoring subscription, and if so you will be charged each month.
2. People don’t want to see what on their credit reports. This is the ultimate head in the sand approach to credit management. Some people know their credit is so bad that they simply don’t want to look.
3. They may not know they have a right to a free credit report. The media coverage of the free credit report law was intense, but only for about a year. Now the only time you hear about your free credit report rights is in New Year’s resolution articles.
Credit Reporting Expert Witness, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling. John is twice FCRA certified by the credit industry’s trade association. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert witness who actually comes from the credit industry and has worked for a credit bureau and a credit score developer.