The Federal Trade Commission has recently issued a statement indicating that it has sent warnings to various online providers of ostensibly free credit reports that have failed to comply with federal guidelines.

Here’s what you need to know about getting your credit report online.

• You’re legally entitled to a free credit report each year. The Fair Credit Reporting Act makes it clear that U.S. consumers are entitled to view a copy of their credit reports from each of the Big Three credit reporting bureaus (Experian, Equifax and TransUnion) every year for free.
• You have one real online option for a free report. The only site at which you are guaranteed a totally free credit report is www.AnnualCreditReport.com. You can also call 877-322-8228 to view your federally mandated free report.
• Checking your credit report is an important part of financial health. The government grants us free access to our credit reports because they’re extremely important tools for contemporary consumers. Knowing what’s in your credit report allows you to get an idea of how lenders and banks view you, to know whether your creditors are reporting information accurately and to determine whether anyone other than you is using your personal information and/or accounts.

The FTC’s warning notes that a variety of online companies advertise free credit reports but require consumers to sign up for unnecessary credit monitoring services or other subscriptions in order to receive the “free” report.

On April 2, 2010, a new rule took effect that requires any provider of credit reports to include on its website disclosures about the actual cost of the services so that consumers can more easily distinguish between actually free offers and those that have hidden costs.

A list of the web sites targeted by the FTC is available at the link provided above.

Why Free Credit Reports Matter

As anyone who has filed for bankruptcy protection knows, keeping track of your finances is a crucial part of any financial recovery or overhaul. The beauty of the Fair Credit Reporting Act is that it gives Americans the tools (free of charge) they need to keep an eye on the big picture of their finances.

If you check your credit report regularly, you can:

• Have a good idea of what to expect from lenders when you apply for loans.
• Take steps to correct any false information in your report and thus prevent other people’s mistakes from costing you money.
• Discover sooner (rather than later) any signs of identity theft that could cost you time and money.
• Know what steps you need to take to maintain or improve your financial profile.