Settlement results in free credit monitoring service By Jen Haley (CNN) -- You can sign up today to receive free credit monitoring services from the credit bureau TransUnion due to a settlement the company reached on a class-action lawsuit. Your credit score is the magic number that lenders use to determine what interest rate you will get on a loan. Want to see your score for free, anytime you wish? How about free 24-hour credit monitoring services for up to a year? You may be eligible for these services if you had an open line of credit from January 1, 1987 until May 28, 2008. That means if you received a car loan, opened a department store credit card or took out a student loan in the past 21 years, you'll qualify. This credit monitoring service will give you unlimited access to your credit report and your TransUnion credit score. You'll also get a notice by e-mail if there have been any significant changes to your credit report, like delinquent accounts or if someone tries to open an account in your name. ...
Last sentence below will set you free. Free credit scores for all, almost TransUnion to give limited credit services to millions, but impact muted By Andrea Coombes, MarketWatch Last update: 3:53 p.m. EDT May 30, 2008 SAN FRANCISCO (MarketWatch) -- TransUnion, the Chicago-based credit bureau, has agreed in perhaps the largest legal settlement ever to offer up to nine months of free credit-report monitoring to more than 150 million Americans. But consumer advocates' reaction to the news was lukewarm, saying the services offered are only somewhat useful. Any consumer who had a credit card or a mortgage, auto or student loan, or other open credit account or credit line in the U.S. any time from 1987 to May 28 this year will be able to choose from two free TransUnion services for a limited time, according to the terms of a settlement, which likely sets a record in affecting the largest number of people. The lawsuit, filed in federal court in Chicago, claimed that TransUnion violated the Fair Credit Reporting Act when it sold consumer information to businesses for their targeted marketing efforts. The law allows selling publicly available information but not private data. TransUnion said it did not violate the law, and it discontinued the practice in question in 2001. "There's been no finding that TransUnion violated any law," said Colleen Ryan, a company spokeswoman. Seeking to end a class-action lawsuit that's been pending for almost a decade, TransUnion agreed to offer consumers one of two options: 1. Six months of TransUnion's credit-monitoring service for free, giving consumers unlimited access to their credit reports and scores, and email notifications when changes occur on their credit reports. The settlement values this service at $59.75. 2. Nine months of the credit-monitoring service, plus access to the credit scores used in insurance decisions, and TransUnion's mortgage simulator service, by which consumers can see how their credit score affects their mortgage rate. Value: $115.50. Consumers who choose the first option sacrifice their right to enter a class-action claim against TransUnion, though they might still bring an individual case, while those who choose the second option sacrifice any further legal claims of any kind in the matter. Consumers will not need to provide a credit card to sign up for either service, and both services will simply end -- that is, TransUnion will not automatically sign people up for a paid service, according to the settlement agreement. There is a third option: Consumers can sign up for a cash payment instead of the free services, but any such payments won't be made for two years -- and they'll be paid only if there's money left after any other "post-settlement claims" have been paid out of a $75 million fund set up by TransUnion for the purpose, according to the settlement. The settlement still needs to be approved by the court. "We're very pleased and we think the settlement is an excellent result for the class," said Chris Micheletti, a San Francisco-based attorney and one of the plaintiffs' counsel on the case, in a telephone interview. Good, but not great Still, consumer advocates say the usefulness of such services is mixed, at best. Already, consumers can get one free credit report from each of the three main bureaus -- TransUnion, Experian and Equifax -- every 12 months. Credit scores are not offered for free, so access to free scores is useful in that it can help consumers understand how specific financial decisions they make affect their score. For instance, a consumer could see how closing an old credit account affects the score. "People will have a sense of how their credit score is changing based on their behavior," said Joe Ridout, a spokesman with Consumer Action, a nonprofit consumer advocacy and education group in San Francisco. But the problem with the services offered under this settlement, he said, "is it's not your true FICO score. It's a proprietary score offered by TransUnion which is much less valuable," because more lenders focus on FICO scores than the credit bureaus' proprietary scores. Also, TransUnion's proprietary score uses a different scale than the FICO, Ridout said. Consumers "risk getting an unrealistic idea of how high their credit score is," he said, noting that TransUnion's score is often 100 points higher than a FICO score. Ryan, the TransUnion spokeswoman, disagreed. "Any generic risk score is intended to tell you how you rate and give you an indication of your creditworthiness compared to the rest of the population," Ryan said. "Many lenders use TransUnion scores today." Meanwhile, other consumer advocates say a credit monitoring service that covers only one credit bureau's information is not the best strategy. A free service can't hurt, but don't pay for limited access, said Paul Stephens, director of policy and advocacy at the Privacy Rights Clearinghouse in San Diego. "If you're only receiving protection at TransUnion and not at the other two agencies, you have a two-thirds chance that the fraudulent activity will not get picked up," Stephens said. "It's very important that any credit monitoring service includes all three agencies." Eligible consumers will be able to choose their free service as of June 16 by going to ListClassAction.com or calling 1-866-416-3470.
