The Federal Fair and Accurate Credit Transactions (FACT) Act gives US residents only one free credit report per year from the three credit reporting agencies (CRA) or credit reporting bureaus, which are Equifax, Experian, and Transunion.
However, some consumers would like to get more than one report per year, preferably for free with no strings attached. The FCRA allows consumers to get additional free credit reports for many of the following common reasons directly from the three CRA.
Reasons for a Free Credit Report
The following actions entitle the consumer to another complimentary credit report directly from the credit bureau under the FCRA if a credit report was a factor in the decision:
- Denial of credit or lowered credit lines.
- Denial of insurance
- Denial from a government license board
- Higher than normal deposit required for a utility or housing
- Adverse job related action such as an on-the-job demotion or a no-hire decision during pre-employment screening
- Unemployed person intending to seek employment within 60 days (limited to one free disclosure per 12 month period)
- Public welfare benefit recipient (limited to one free disclosure per 12 month period)
- Consumer believes he is a victim of identity theft
In this difficult economic climate, some consumers have encountered difficulties such as late credit card payments and late mortgage payments. As a result, many have received letters from their lenders lowering the availability credit based upon information received from a CRA. Because of this, many consumers have access to additional free credit reports.
Keep in mind that free FCRA credit reports must be ordered directly from the credit bureau and not from a third party company. Also, the credit bureau used must be the same as the one listed in the denial letter, if applicable.
FICO Credit Scores are Not Free
Although any of the above reasons entitle consumers to a free credit report, it does not entitle them to a free FICO score even though they're used extensively in lending. At the time a complimentary report is ordered, the FICO score can be added for an extra fee. Other extra services such as credit monitoring are also not included as part of the complimentary report.
As the regular price of a single credit report rises above $10, many consumers would like to find a way to get it for free. Given the difficult economy and tighter credit environment, it is unfortunately becoming easier to be denied something based upon a credit report, thus making many consumers eligible for a free report under the FCRA.
Reference:
Federal Trade Commission. "Your Access to Free Credit Reports." (April 4, 2009.)
