A free credit check from TransUnion is now a reality and will be
approved by the court in September 2008. TransUnion is one of the big three credit reporting agencies and the company opted to settle a suit against them by a group of plaintiffs. The credit check which is coming is different from the current free annual credit report that you can obtain from the credit reporting agencies. This one allows you to obtain a free credit report as well as a credit score from TransUnion Corp., one of the big three (the other two are EquifaxExperian
). This results from a settlement of a long-running class-action lawsuit, filed 10 years ago, and which affects more than 160 million Americans.
The agreement would entitle consumers to at least six months of a TransUnion monitoring service, giving them access to the latest information in their credit reports as well as their current scores at any time.
Here is a summary of how it will work by September of 2008. You will certainly get a free credit check plus some more.
Anyone who had any type of loan account between January 1987 and May 28, 2008 would be able to select one of two options:
A basic service would provide free credit monitoring for six months. It normally retails for $59.97, according to the settlement. Those who select this service can also apply for a cash payment.
An enhanced service would provide nine months of free monitoring, plus use of a "mortgage simulator" that lets consumers see if they improve credit score
affect their mortgage rates and how much they could save if they did.
This option also includes access to one's insurance
score, which is used by insurers to set rates. The settlement values this option at $115.50.
Under the settlement, a credit card number would not be required to sign up for either service. After the free service ends, TransUnion could not charge for an extension unless it was requested by the consumer.
The agreement also creates a $75 million fund that would be used to notify class members about their rights, to pay attorneys and pay any damages agreed to for people who opt out of the class and sue TransUnion on their own. If there is money left in the fund after two years, it would be paid to people who applied for the cash.
Consumers who received the enhanced service don't have the right to apply for the money.
A free credit check with a free credit score is very important to consumers. Knowledge of credit scores allow consumers to improve it and let them know whether they are creditworthy. A credit report supplied by TransUnion and the other two biggest credit reporting agencies, Experian and Equifax, contains information about your current and recent home, new auto loan /used auto loan
, credit cards and other credit accounts, including how much is borrowed, your credit limits and whether payments are made on time.
Federal law entitles everyone a free annual credit report from each of
the three major credit reporting companies, but it doesn't provide access to credit scores
. A free credit check therefore is vague to consumers who can see whether they are late or not on their payments but who are left in the blind whether their score is good enough to qualify for the best auto loan deals.
What prompted the lawsuit stemmed from the business practice by the TransUnion of slicing and dicing data from the company's massive credit files to generate customized lists of consumers. Retailers, lenders, and other businesses would buy the lists to use in their marketing.
Federal law bars the sale of a person's private credit information except under certain circumstances, such as when he or she has applied for a loan. Although companies can gather and sell public consumer information, such as mortgage lien information that's filed with counties, plaintiffs in dozens of suits argued that TransUnion had overstepped those bounds, violating privacy protections.
The plaintiffs alleged that anyone who had a credit file maintain by the company had suffered damages, mainly be being inundated with junk mail from marketers who bought data about them. TransUnion discontinued the list-marketing business in 2001 and had claimed that it didn't violate the law.
Get this free credit check, a free online credit report, if you are not part of the settlement or while waiting for the settlement. This free annual credit report though doesn't include the credit score.