Don’t Pay For Free Stuff
April 24, 2015I was walking down a long pier with my kids not too long ago and there was a big splash off to our left.I jokingly yelled “Free Willy” and my kids looked at me like I was having some type of out-of-body experience. They had no idea what I was talking about since the movie was made well before any of them were born, and while they’ve seen nearly every Disney and Pixar movie made since their birth, I guess they missed some of the older ones. They know way more about “Finding Nemo” than “Free Willy.”
On the flip side of that, I know more about Atari than Xbox One or PlayStation 4. We all see the world through a different set of eyes and our life experience shapes us. That is true not only of movies and gaming platforms, but our financial lives as well.
Just a few years ago, I was being sent emails, regular mail, phone calls and in-person solicitations for services that would provide my credit score every month for the low low fee of $9.99 or $19.99 per month. I refused to pay for my credit score then, and I refuse to pay for it now. After all, it’s MY score! Why should I have to pay for it?
But I have met a lot of people who decided to pay for their scores and continue to pay for it to this day. Any time I get a chance to talk with someone doing that, I suggest that they cancel that service immediately and use the added cash flow to either pay down debt or add to savings. It’s one small step that can produce large results over the course of time.
If they cancel that service and no longer pay for it, what am I suggesting they do instead? Over the last several years, I have become a huge fan of both Credit Karma and Credit Sesame. Each site gives you an update of your score at least once a month. They have smartphone apps, and they send alerts any time something changes in your credit report. Oh…and both are completely free!
With me refusing to pay for my credit score, these sites fit perfectly into my view that it’s YOUR score so you shouldn’t be forced to pay for it. To me, it’s like someone pick pocketing you, taking your keys and then standing next to your car and offering to sell your keys to you at a discounted price. Something is fundamentally wrong in those equations.
An area that has confused a lot of people I’ve met with recently is the difference between the credit SCORE and credit REPORT. The score is a number, while the report is a listing of your accounts, past and present, that involved passing a credit check and reporting balances to the credit bureaus. There are a lot of “free” credit report websites out there, but when you dig into the site and try to get your “free” report, you have to give a credit card number and pay a fee.
Exactly HOW is that free??? Again, it’s my credit report. I don’t want to pay for it.
This is one area where federal regulation has actually been helpful. We are all entitled to one legitimately free report from each of the three major credit bureaus annually and there is a website to facilitate this. I have used www.AnnualCreditReport.com in order to get my reports and because of my name, that’s a great thing. Can you believe there are actually a few other Michael Smiths out there? More than occasionally, some of their information finds its way onto my credit report.
Here’s what I do: Since there are three reports over a 12 month window, I order one in January, one in May and one in September. I space them four months apart so that I know I’m never more than four months away from the most recent file, and almost every time, there is a new address (that isn’t mine), a new employer (not mine) or a new account (definitely not mine) and I have to file a dispute and have it removed. When I did all three at the same time, I could have 10-15 mistakes on my report. Thanks Mom and Dad for giving me quite possibly the most generic name on Earth!
What can you do? Always be aware of your credit score and NEVER pay for it. Always have access to a recent credit report and NEVER pay for it. Being armed with this knowledge can do nothing but help you in the long run. In a world where your credit score has an impact on your insurance rates, your ability to freely find another job and many other subtle areas of life, having a place to see your credit information and then improve upon it through stellar financial behaviors has never been easier or less expensive.