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Get Your Free Credit Report -- Without the Hassle

We all have the legal right to see our credit-score reports for free, but getting them can be complicated.

Teresa Yakes learned the hard way just how complicated it is to get one of those reports. When she was struggling in May to avoid bankruptcy and working with a debt consolidation company, her lawyer told her to get her free credit-score report online. Yakes went to what seemed to her like the obvious place: freecreditreport.com . (Its Web page even features a smiling blond woman holding a giant orange card that says FREE CREDIT SCORE & REPORT.)

Weeks later, Yakes discovered that the site now expected her to pay a fee every month. "I thought, 'screw that,'" Yakes says. "It's supposed to be freecreditreport.com."

To be sure, freecreditreport.com's home page says in a box underneath the blond woman that if you order your free report at the site, you'll also begin a subscription to Triple Advantage Credit Monitoring. That not only gives you those promised "free" reports, but also checks them daily at a fee of $14.95 per month if you don't cancel your membership within a 30-day trial period.

"We do put that information in to make sure the consumer understands," says Kelly Poffenberger, a spokesman for the Dublin credit-reporting agency Experian Group, which owns freecreditreport.com.

Whether they understand what they're getting or not, many consumers are choosing to pay to see their credit scores these days, and agencies are earning gobs of money by selling services that take the concept of monitoring to new heights.

Experian, for example, raked in $450 million in revenue during full-year 2007 from products such as Triple Advantage Credit Monitoring, compared with $100 million five years ago. Meanwhile the company's rival, Equifax (EFX - Get Report), made $150 million in 2007, compared with $40 million five years ago, according to Michael Meltz, an analyst at Bear Stearns. "It's a big business," Meltz says.

It's happening even though the Fair and Accurate Credit Transactions Act of 2003 requires the agencies to notify consumers of their right to see their credit files for free. Despite that mandate, only 22% of nearly 5,000 people surveyed between March and June 2006 had gotten free credit reports around six months after they became available nationwide, according to the Federal Trade Commission's 2006 Identity Theft Survey Report , which was released in November.

So, how do you get the free kind of credit report? You can go to AnnualCreditReport.com , call 877-322-8228 or fill out the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. These are the only official channels to make a request for a free annual credit report.

You can order copies of your reports at once from all three agencies -- Experian, Equifax, and Chicago-based TransUnion -- if you want to keep an eye out for changes in your file or as a protection against the risk of someone using your personal information to obtain credit. You can also order one free report from a different agency every four months.

Consumer advocates say that doing these basics alone is the most sensible way to watch your credit score.

"We don't feel necessarily that it's worth it," to pay extra for credit monitoring services, says Linda Foley, founder of the San Diego nonprofit Identity Theft Resource Center . She points out that even daily monitoring services can't make up for the time lag between when someone has taken out credit in your name and when the issuers report that to agencies.

And other billers, such as utilities or hospitals, might not say anything to the credit-reporting agencies all the way until an unpaid bill in your name goes into collections, Foley adds. Instead of paying the agencies for a false sense of security, Foley recommends setting up your own, free credit monitoring service by ordering one report at a time every four months.

If you're looking to do this, consumer advocates warn to steer clear of the numerous sites that might seem to exist in order to offer free reports but then invite you to buy other related services. A 2007 Consumer Reports WebWatch analysis of 24 such Web sites found that nine were owned by or closely connected to TransUnion; eight were owned by or otherwise closely connected to Experian. The list includes TransUnion's TrueCredit.com and Experian's ConsumerInfo.com , among others; you can find the other 22 named here .

"If you go to TrueCredit itself, we tell you on the home page there's a free trial, but it's never promoting the product or the services as free," says Steve Katz, a spokesman at TransUnion. "It clearly lays out the cost."

Officials from all three agencies say consumers should find out about their credit scores by using the more full-fledged monitoring services available for sale.

"We have a lot of demand from consumers who want to take a much greater step than just getting their free report and taking a look once a year," says Chris Atwood, vice president of Equifax Personal Solutions. "Some consumers feel they want the ultimate in protection, regardless."

Sonja Ryst has previously worked as a staff reporter at BusinessWeek.com and Dow Jones Newswires. She's also freelanced for publications including The Wall Street Journal. She graduated from Stanford University with honors.

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