The Truth About Online Credit Reports

So many people are worried about identity theft and the status of their credit report these days. But with so many companies claiming to offer you a free report, it is no wonder consumers are confused and overwhelmed about how to get the information they need. The truth is many companies are not entirely interested in giving you a free credit report, as they are in making money off of you with their other products and services. How does a consumer know where to turn for the information they need?

The Federal Trade Commission is Your Friend

The Federal Trade Commission, a Federal agency set up to protect consumers, is the only place online that offers a truly free credit report through Experian, Equifax, and TransUnion. You can receive reports on your credit every 12 months with no strings attached. Consumers often times are not even aware that they are entitled to review reports on their credit at least once a year, much less get it from a government agency.

Pitfalls to Getting Your Credit Report

Other companies will entice you to their website by stating you will receive a free credit report. Once at the website, you will often times find that you have to buy other products or services before your report will be issued to you. That's great, if you are interested in the other products and services, but most times consumers just want to see their credit records only.

You may see ads on television or the Internet, or hear ads on the radio from companies offering free credit reports. Be alert to the fact that when you visit the website you might be obligated to buy additional products or services before receiving a report on your credit status. The FTC receives many complaints from consumers who have fallen into this credit report trap. In fact, they encourage you to report any spam websites that you come across.

How to Get Your Free Credit Report

The FTC advises consumers that you cannot get your free credit report directly through Equifax, TransUnion, and Experian. You must contact these companies directly through the FTC website. Simply type in "annual credit report" and look for the official website in your search engine. There are many websites that will have a similar name to this one, so be sure you are on the correct website by typing your search carefully. The site will guide you through the appropriate steps to receive a free report on your credit status.

Consumers typically type in search phrases such as "free credit score," "free credit history," and other similar phrases only to land in a website that wants to sell you something you don't need. Avoid using these searches in the future to avoid spam websites.

You can get your annual report on your credit status for free. You can keep a watchful eye on your credit history in these days of high identity theft rates. You just have to know where to go to get the information you need.

Gene Pimentel is the author of "Identity Theft Trap" and other informative
personal finance publications, freely available at his resource site
JustCreditReports.com and
IdentityTheftTrap.com

Why Minimum Monthly Payments Will Cost You Big

Sometimes credit cards make life a little too easy. How is that possible? By allowing us to make purchases we really can't afford, and then giving us an unlimited amount of time to pay off the debt. It sounds great in theory, but ask a card holder who's been paying off the same debt for years. They'll tell you that extending your repayment isn't as easy as it sounds.

That is because of the amount of interest you accrue when you stretch out your debt over a long period of time. In fact, credit card companies count on card holders with revolving debt (debt that rolls over from one month to the next). Those consumers pay the fees and interest rates that keep the card companies so profitable.

As a card holder, minimum monthly payments are your enemy. Consider this: a fairly typical household with $6,600 of credit card debt, making minimum monthly payments, would take over twenty five years to pay off their balance - and that's with a decent interest rate! It's nearly impossible to make a dent in your debt by making minimum payments.

Some card holders lament the fact that their debt actually increases each month when they make minimum monthly payments. I've seen this firsthand; fees for carrying a balance, combined with interest, can really overcome a minimum payment. My experience made a believer out of me, and since then I have always paid two or three times the minimum monthly payment in order to stay ahead of the debt.

Senator Dianne Feinstein of California is the proponent of a new bill that would require credit card companies to educate their consumers about the consequences of minimum monthly payments. This would be a huge boon to card holders, as it would illustrate just how long it takes to pay off a balance with minimum payments. Most card holders carry a balance from month to month, and 11% of them make only the minimum required payment. Many simply don't realize what a poor choice this is.

The best way to handle credit card debt is to prevent it. Pay off your balance in full each month. But if an emergency or special event has left you with a heap of credit card debt, there are steps you can take to reduce it quickly. Remember: the longer you take to pay off an interest-bearing balance, the more you will ultimately pay.

To get serious about paying off your credit card balance, pay double or triple the required amount each month. If you get a work bonus or a tax return, use some of it to pay down your balances. Transfer high-interest balances to 0% interest credit cards to make your monthly payments mean something. Just be sure to pay off the balance in full before that 0% interest period ends.

Minimum monthly payments might seem cheap at first, but they come with a hefty price tag. Get your debt paid off as quickly as possible to avoid throwing money away on fees, penalties, and interest.

About the Author:
This article has been provided courtesy of Creditor Web, http://www.creditorweb.com .