The Law

• The Fair and Accurate Credit Transactions Act, an addendum to the Fair Credit Reporting Act, gives consumers the right to receive one free credit report each year from the three major credit bureaus: Equifax, Experian and TransUnion. To comply with the law, the bureaus jointly created the Annual Credit Report website, which allows consumers to order the reports online. You can order just one report, all three or only two. The website also lists a mailing address and toll-free number for consumers who would rather order the credit report by mail or phone.
  
  

Considerations

• Under the Fair Credit Reporting Act, consumers are entitled to receive a free credit report under certain limited circumstances in addition to the annual free report provided through Annual Credit Report. According to the FCRA, if a creditor used your credit report when making an adverse credit decision against you, you can receive a free copy of that report if you request it within 60 days of the credit decision. However, you can only obtain the free report from the bureau the creditor used. If more than one bureau report was used, you can obtain one from each. Order the report directly from the bureau, either on its website, or by phone or mail.
  
  

Significance

• Although The Fair Credit Reporting Act provides a free report based upon an adverse credit decision, that requirement is limited. The Fair Credit Reporting Act does, however, provide consumers with three other qualifying conditions for receiving a free report, and those three are not credit-based. You can receive a free credit report from each of the bureaus if you are on welfare, are unemployed and will look for work within 60 days or are the victim of fraud, including identity theft. These free reports are ordered directly from the bureaus as well.
  
  

Warning

• Certain websites market free credit reports to consumers, but there usually is a catch. These websites typically require you to sign up for a trial offer of credit monitoring or some other product or service. The website requires you to enter your credit card data, and it will charge you a monthly fee if you don't cancel. The Federal Trade Commission sued Experian in 2005 for its deceptive advertising of free credit reports on the freecreditreport website, which it owns. Experian settled the suit with the FTC and agreed to repay consumers for the charges.