I've blogged before about the ads for Freecreditreport.com, the newest of which is less creepy but even stupider. The primary problem with all these ads is that knowing your credit score doesn't really do you much good unless there's an error--and most people's credit problems stem, not from errors, but from the fact that they have borrowed too much money, or don't pay their bills on time. The first commercial actually offered a situation where you could do something: prevent a hacker from stealing your identity. The second painted a situation where you might arguably do something--ditch your fiancee because she has bad credit--but only if you were a complete creep. The third one doesn't even offer that consolation:
If he'd known his credit was bad he could have . . . thought harder about the color choices on the crap car he can afford. He wouldn't have actually been able to buy a more expensive car. So what's the point of using their service, again?
I could see some education value. E.g. if the report let you figure out which behaviors were lowering your score (like too many credit cards) you could change your life in ways likely to improve your future score.
I could see some education value. E.g. if the report let you figure out which behaviors were lowering your score (like too many credit cards) you could change your life in ways likely to improve your future score.
The official credit reports you can get for a small fee from myfico.com contain suggestions for score improvement, dunno about freecreditreport.com.
The other big problem with freecreditreport.com is that the credit report is NOT FREE. You have to sign up and pay for their "credit monitoring" in order to get your "free" credit report. This makes "F-R-E-E that spells FREE" by the most irritating part of this irritating jingle.
In the past the yearly credit reports in MA included the credit score plus some advice. This was before they were mandated by the feds, and realized they could make more money by withholding the info.
(or the feds required less than MA)
Anyways, if I remember the advice correctly, I was told to both increase the number of credits cards I owned and to decrease the number of credits cards I owned.
Very Zen.
The best thing you can do is not waste your money and pay off any outstanding loans (the free credit reports should show you ID theft problems).
Ooops -- meant to say "by FAR the most irritating part of this irritating jingle". Here in Seattle it plays on the AM news radio station (KIRO 710) about every third commercial during the morning drive.
The other big problem with freecreditreport.com is that the credit report is NOT FREE. You have to sign up and pay for their "credit monitoring" in order to get your "free" credit report.
I think I almost got scammed by this service or something similar. I ended up getting the free credit report and then canceling a couple of dubious credit-monitoring services. So you can get the credit report for free. Then again, you can also get it for free by requesting it from credit agencies, right? It's definitely a waste of time and energy, even if it's not necessarily a waste of money.
As far as whether this add is nonsensical, I think the idea is, "If this guy had been monitoring his credit rating with our product, he would have seen his score nose-diving and done something about it." That's not exactly compelling but it's not totally incoherent.
Every few years I order up a set of credit reports from MyFico.com (I get the Credit Complete package, which is a little less than $50). It's not particularly revelatory but I think it's probably a good idea to know where you stand. I don't go in for the credit monitoring services, though I imagine that such a service might be useful to someone who has been a victim of identity theft in the past.
One remarkable thing about the reports is how old some of the data is. The electric company I had an account with for 3 months 15 years ago shows up on some of the reports.
Actually, the real reason his "posse's gettin' laughed at" has nothing to do with the car, but the fact that he thinks he and his ofay loser friends constitutes a "posse"...
This is a scam. They confuse you with https://www.annualcreditreport.com/cra/index.jsp where you are allowed one free credit report a year from each of the three agencies. Those stupid commercials are an attempt to get you to pay for a service you don't really need. Of course they don't want you to know about the free one.
I have a similar credit reporting service (with monthly charge), and while the score itself isn't very informative, the paragraphs of reasoning are - mostly because several of them are counterintuitive.
Okay, credit card maxed out is bad, duh. Okay, late payments bad, duh. But they're rating me low because a high percentage of the number of accounts I hold are over 50% balance. Hmmm, interesting. This seems to imply that having that one maxed out credit card is significantly worse than having that one maxed out credit card and three empty ones. And that one big maxed out card with another empty card is better than two medium ones at 70%.
And credit inquiries are bad for my score... what? This is like a zen thing now - my credit is only good as long as no one asks how good it is?
Credit history established by longest account still open - so if I pay off and cancel my first credit card, that will actually harm my credit?
Not all of this is the obvious intuitive "don't borrow more than you can afford" sort of thing. There's some actual complexities in the system that are good to know about.
My bank contracts with a monitoring service to offer real-time credit monitoring and ID theft protection insurance for $13/month, which includes quarterly reports, an automatically-issued statement of recent activity any time one of the Big Three updates my credit records, and loss protection up to $50k on all of my bank accounts.
In my case, for a number of years I didn't use a credit card at all, and made all transactions with cash, check, or debit, including a few purchases online and in other states during vacations. Since that leaves my account data potentially floating around in a wide number of places, I figure the thirteen bucks a month is worth it.
It's rather interesting (revelatory, even) for someone outside of finance to see when and how one's information is updated in the various credit bureau files, in particular the propagation delays for things like change-of-address updates.
And credit inquiries are bad for my score... what? This is like a zen thing now - my credit is only good as long as no one asks how good it is?
Correct. Sort of. The type of inquiries than can lower your credit score are "hard" inquiries, which are ones made when you apply for credit. "Soft" inquiries are those made when you look at your credit report for informational purposes not connected with actual credit applications. Other types of soft inquiries are ones that prospective creditors make in connection with those "pre-approved" offers cluttering our mailboxes or which existing creditors make in order to monitor their customers. Soft inquiries have no effect on your credit score.
Any hard inquiries made in connection with car loan or mortgage applications within a 30-day period are counted as just one inquiry. The reasoning is that people applying for car loans or mortgages might reasonably want to shop around with different lenders, while a person applying for a number of, say, credit cards may be heading toward financial trouble.
In any event, inquiries affect your credit score only to a modest extent. Late payments or heavy debt loads have a far greater and worse impact.
Credit reports do contain errors, rather often in fact. To be sure, most of these are trivial (mispelled names, incorrect dates etc.) and they have no effect on the credit score. Still, I think you will find a non-trivial number of people have had erroneous negative entries posted to their reoports-- I'm one-- and these can be hard to clear, and are always at risk of reappearing due to over-zealous (or even donwright unethical) collection agencies.
My girlfriend's mom charged huge amounts of money to her daughter's credit card and I've heard of that happening before. Granted, these 'free credit report' guys sound like scammers, as mentioned earlier.
As noted above, everyone gets free reports (actually free) from annualcreditreport.com once a year for free. This is indeed a scam for the vast majority of people, and it seems deliberately constructed to confuse people looking for the government-mandated free report.
The high usage ratio a posted listed above is actually rightfully considered a sign of impending bankruptcy. Creditors assume that when you use a lot of your available credit, you are in trouble. You would be much better off opening 4 or 5 credit accounts, even if you never use them.
In any case, anyone who pays their bills on time for seven years or so, has a reasonably low usage ratio, and has evidence of payment history from multiple sources (i.e., car payments, mortgage, credit cards, etc.) will have a golden credit score. The dings from "hard pulls" are only a few points here and there, and go away quickly. If you've shown responsibility with credit, you will not find it hard to get a loan.
I agree that knowing your own credit score is not very helpful, but knowing the credit score of a potential spouse can be extrememly valuable. If that person has accumulated a lot of debts it might pay for him/her to declare bankruptcy before you get married, at which point his/her debts become your debts. If you marry someone who has declared bankruptcy I don't believe it should have any effect on your credit rating.
As an aside, doing a credit check on a potential spouse can turn up other useful information that one ought to know before tying the knot. This may not be necessary if you are both young, but if you are up in years and have some assets, it is essential.