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How to Get Free Credit Reports -- With Score

Jeffrey Strain

Lending institutions are attempting to reduce their risks and giving more scrutiny to your credit score. Despite this, many people still don't understand the importance that their credit score plays in many aspects of their financial life.

In an April survey, The Center for Economic and Entrepreneurial Literacy asked 1,000 people what were the four most relevant factors in obtaining a mortgage loan. Even though credit score tops this list, nearly seven out of 10 respondents failed to identify it as the most important factor when obtaining a home loan.

Your credit score goes far beyond influencing the rate you receive on a home mortgage. It will help determine the rate you get on a car loan, the interest rate you pay on credit card balances and which type of credit cards you qualify for. It influences the rates you pay for auto, health and homeowners insurance.

It can even influence whether you get a job; people with poor credit can be viewed as more likely to have problems at work. It's common for apartment managers to run a credit check on prospective tenants, too -- so your ability to find a place to live may depend on it.

In all, a good credit score can be worth more than $1 million in savings during your lifetime over someone with poor credit.

Getting your credit report for free has been easy for the last few years through the government-sponsored Web site AnnualCreditReport.com.

The Web site allows you to get a credit report from Equifax, Experian and TransUnion, the big three credit reporting agencies, at no cost, once a year. While this will give you access to the information that is contained within each of the reports, this credit report won't give you your actual credit score.

This has spawned an industry offering "free" credit reports, but they usually came with a catch. You are able to obtain your credit score, but in order to do so you are required to enroll for a free 30-day trial of some credit service and required to give your credit card number. If you fail to opt out of the service, you get charged enough to more than cover what a credit-score report would cost.

According to the Federal Trade Commission, people may be entitled to a free credit report and score by contacting Equifax(EFX Quote) (800-685-1111), Experian (888-397-3742) or TransUnion (800-916-8800) in the following situations:

Denial due to score. If your credit was responsible for you being denied credit, insurance, or a job, you are entitled to a free credit score report. When you are denied, the notice should show which of the three credit reporting agencies supplied the report. You can request a free copy of your credit report and score from the agency that supplied the report, as long as this is done within 60 days.

Unemployment. If you don't have a job, you're entitled to a free report with credit score from each of the credit reporting agencies. The only stipulation is that you plan to look for a job within 60 days.

Welfare recipients. If you are receiving welfare, you are entitled to get a free credit report and score.

Identity theft victims. If you believe that you may have been a victim of identity theft, you can request a free credit report. With the number of company and government laptops that get stolen with personal information on them and an ever increasing number of online personal data breaches, the possibility that you could be a victim is probably greater than you imagine.

If you do not meet any of these conditions for a free credit score, Credit Karma is a new Web site that gives you your credit score for free without forcing you to sign up for a trial offer or give your credit card number. It offsets the cost of the credit report it purchases for you by offering deals and advertising on its site.

You do have to give your Social Security number in order to access your credit score, which is something you need to decide if you're comfortable doing. While the site claims to have high security for this information, there is always a risk involved, even if it's tiny. You also won't be able to see your credit score from each of the three companies.

Credit Karma currently only offers your score for TransUnion, although it plans to offer credit scores from all three major agencies in the future.