Has the increased availability of free credit reports improved consumer money management?
Not on its own, no. Remember that just knowing a credit number isn’t enough; you’ve got to understand what affects your score, and how it affects you. It’s one thing to know your score; it’s another thing to have it change your decisions.
How important is it to check your credit report more than once per year?
It’s vital to check your credit report frequently, especially with the ever-increasing threat of identity theft. I check mine at least weekly, just to see if anyone’s tried to open up a new account in my name.
Why do you think some consumers are hesitant to check their credit report for free online?
Same reason they’re afraid to go to the dentist. If you’ve not checked in a long time, there’s a lot of damage that might have been done without your awareness, so seeing it all at once is a scary thing.
How much is a free credit report worth (i.e. what kind of a value does it represent)?
I see a free credit report a lot like an insurance policy: even if you never use it, it’s still worthwhile to get it. Best case scenario: you get peace of mind, but you never have to use it because your credit is always high and your identity is never stolen. Worst case scenario: you learn what’s damaging your credit and can take steps to make it better. It’s tough to put a dollar value on that, but I know I sleep easier because I have credit monitoring.
What kinds of mistakes might consumers make if they take action based on a credit report that is a week or month old?
You might make budgeting errors, for one. If you use last month’s credit score as a tool to apply for a loan, and meanwhile your credit has suffered due to late payments, additional credit applications, identity theft, etc., then you may not get the interest rate you were hoping for.
Many non-profit organizations recommend that consumers only use the government-sponsored site AnnualCreditReport.com to check their credit report; are they doing a disservice to constituents, considering that you can only check each report once per year through Annual Credit Report?
It’s not a disservice, especially since AnnualCreditReport.com is a very reliable service. If you view it as a step up from no credit checks at all, it’s a huge deal. If you view it as a step down from daily credit monitoring, of course that’s a disservice, but I think for an awful lot of people, one check per year is far better than none.