A Free Credit Score Followed by a Monthly Bill

On television it’s hard to miss the wildly popular band of slackers singing ruefully from a shabby apartment or while waiting tables in pirate regalia. The ruined credit that led to their financial misfortune might have been sparkling if only they’d tracked their status on freecreditreport.com.

The Federal Trade Commission is not amused. It has long believed that the company that owns freecreditreport.com is deliberately diverting people from a government-mandated site where consumers can get free credit reports by law, and using the reports as a lure for a $14.95 monthly service that alerts subscribers to important changes in their credit status.

In an unusual salvo, the government has even produced its own spoof videos featuring a trio remarkably similar to the gang in the earlier commercials, singing a warning: “Other sites may turn your head; they say they’re free, don’t be misled. Once you’re in their tangled web, they’ll sell you something else instead.”

But while the government has taken issue with the ads, it has had little to say about credit monitoring services themselves, a rapidly expanding niche approaching $1 billion in sales for which millions of people have signed up, often unwittingly. The problem, say critics, is that most people really don’t need it.

Credit monitoring provides customers with real-time updates about changes to their credit files that might affect how lenders see them. These services can be useful for identity theft victims, for example, who want e-mail alerts about new accounts that thieves might have opened in their name.

Yet for the vast majority of consumers whose credit status doesn’t change quickly or drastically, a monitoring service is a waste of money, these critics say. Keeping a close eye on your bills and checking your credit report several times a year is enough.

And that can be done without spending a penny because the government requires the three major credit bureaus — Experian, which owns freecreditreport.com, Equifax and TransUnion — to provide one free report annually to consumers. New York Times