Consumers can get free credit score, report as part of settlement

Consumers can find out their credit score and get a credit report at no charge under terms of a recently settled class action suit involving TransUnion, one of the country's three major credit reporting agencies.

Anyone who has ever had a credit report on file with TransUnion between Jan. 1, 1987, and May 28, 2008, is eligible to receive this benefit as part of getting free credit monitoring.

This means anyone who had a credit card account or loan open during this time is eligible. That could be more than 160 million Americans.

Under terms of the settlement, eligible consumers will be able to select either a free six-month credit monitoring service that TransUnion normally sells for $59.75 or a nine-month enhanced credit monitoring service that costs $115.50.

It is believed to be the country's largest class-action settlement in terms of the number of people that are covered, said Ken McEldowney, executive director of San Francisco-based Consumer Action.

The three major credit reporting agencies do provide credit scores to consumers either through a one-time charge or through credit-monitoring services that are sold on a monthly subscription basis.

Credit reports amount to a history of what kind of loans and credits cards you have and whether your bills are paid on time. A credit score is a three-digit number, typically ranging from 300 to 850, that is based on the information in your credit report. The higher the number, the more likely lenders view you as good credit risk who will pay off loans.

McEldowney had mixed reviews on the settlement.

It's a good thing for consumers in that it will probably result in more poor people becoming aware of their credit history and credit scores, McEldowney said. The people that take advantage of the free credit report program tend to be higher-income people, he said.

Still, McEldowney said the free credit score being offered by TransUnion is its own product and not an actual FICO credit score, which he said is more useful to consumers.

"So it is less valuable, but I think it would still be useful in terms of letting people know in general how their credit history is viewed" by potential lenders, he said.

The settlement agreement was reached in May between Chicago-based TransUnion and attorneys who filed the lawsuit on behalf of consumers over alleged privacy issues.

source : http://www.mercurynews.com/businessheadlines/ci_9716378?nclick_check=1