Three Reasons Why FREE CREDIT REPORTS are BAD!

Montinoring your credit is good. It is necessary today on a semi annual basis to make sure you do not fall victim to identity theft.  If you are in the middle of credit rehab, then a daily monitoring service with the ability to pull a fresh consumer report every 24 hours is a must.

1. The main reason why free reports are bad is because when you need to file a dispute with Transunion, Equifax or Experian, they now have 45 days to do their research rather than 30 days.  If you are playing the loophole game in credit rehab, this is very important.  If you have a problem you want clear up, it is reasonable to get it cleared up a quickly as possible.
2. You need to order your reports directly from each Credit Reporting Agency.  A Free Trimerge (or even paid) report will do you no good.  If you are going to fix errors on your reports you need the real McCoys.
3. The scores that come from Trimerge reports are FAKOs not FICOs.  Only MyFICO.com has the real scores.  MyFICO scores will match what a car dealer or mortgage lender will pull, as long as your credit does not change between the time you order a MyFICO.com report and when you apply for credit.  I don’t put much stock in auto based FICOs or Mortgage based FICOs.  Have not seen one yet, but they could be out there.

OKAY Ted, What is a FAKO? A FAKO is the credit score you see from third party credit monitoring service, for example Truecredit.  While there is benefit from using a service like Truecredit, remember that the Fair Isaac Corporation owns the FICO formula and it is as guarded as the formula for Coca-cola and Kentucky Fried Chicken.

There are two types of credit report pulls.  One is known as a “Hard Pull” and one a “Soft Pull”.

Hard Pull – This is when you apply for credit.  This pull (inquiry) will show on your report and after certain numbers of pulls will start to affect your score.  Typically if you are shopping for a loan for a home or car, multiple hard pulls within a short time frame will not decrease your score.  These pulls will stay on your report for two years before dropping off.

Soft Pull – This is when you as a consumer pull your own report through a thrid party service such as myFICO.com or TrueCredit or order your report directly from Transunion, Equifax or Experian.  You can pull daily through a service like TrueCredit and monitor rehab or changes in real time.  SOFT PULLS have no (ZERO) impact on your score. In fact they can help your score on Transunion and Equifax.  Continual daily soft pulls on TU and EQ will eventually bump off Hard pulls, so if you have too many hard pulls and do not want to wait 2 years for the hard pulls to fall off, you can bump them off early through daily soft pulls.  It takes as many as 100 or more soft pulls, but I have seen it work.

Remember FREE REPORTS are BAD.  If you cannot afford to pony up the whopping total of $30.00 to get the three reports directly from each Credit Reporting Agency, then you should not be applying for new credit.

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Author – Ted Mackel Simi Valley Real Estate Agent – Keller Williams Realty

Ted Mackel is a top producer at Keller Williams Realty Simi Valley,

specializing in Simi Valley Real Estate

(805) 432-7705