Free Credit Scores, Not Just a Credit Report

If you’re thinking about buying a home or refinancing – even if you’ve got excellent credit – you may want to avail yourself of a forthcoming free service that could help you get a better mortgage rate.

Under the terms of a national class-action settlement, you may qualify for six or nine months of daily monitoring of your credit file plus unrestricted access to your credit report and score. To be eligible, you need to have had any form of open credit account – a charge card, student loan, auto loan or a mortgage – at any time between Jan. 1, 1987, and May 28, 2008.

An estimated 160 million American consumers can meet that criterion, though eligibility expires Sept. 24.

The free monitoring services could prove especially useful for home buyers who need to keep a sharp eye on their credit reports in the months immediately preceding their loan applications. Any significant glitch, inaccurate negative information or missing positive information in their files could depress their credit scores dramatically.

That, in turn, could make it tougher for them to obtain the best rates in today’s market – where lenders are demanding higher credit scores for their standard rates, and often won’t touch applicants who have low scores. For home buyers with minimal down payments, there’s a double whammy: Mortgage insurers have imposed strict new minimum credit scores for applicants with less than 20 percent down payment cash.

Under the terms of a settlement agreed to by TransUnion – one of the three dominant credit repositories – you can visit the Web site www.listclassaction.com or call (866) 416-3470 to register a claim.

The settlement sets up a tiered menu of remedies for you to choose from, including:

• Nine months of free credit file monitoring services if you agree not to file an individual lawsuit against TransUnion seeking damages. In addition to monitoring – where the bureau alerts you by e-mail within 24 hours of any significant change in your credit data – you can also lock your entire file so that lenders, insurance companies and others cannot access your TransUnion report without your permission. On top of this, you can receive "unlimited daily access" to your credit report and TransUnion credit score, plus a "suite of insurance scores and a mortgage simulator service" to help you qualify for a better home loan rate. TransUnion estimates the current retail value of this option at $115.50.

• Six months of free credit monitoring, credit lock privileges and unlimited access to your credit report and score. This option, valued at $59.75, allows you to receive a possible cash payment out of the $75 million fund if any money is left over after paying lawyers’ fees, notification costs, and priority payouts to named plaintiffs.

• Even if you opt to file an individual lawsuit against the company, you are still eligible to receive six months of free credit monitoring.

Think of this settlement this way: It’s free and it’s educational at the very least. If you’re serious about getting a mortgage in the months ahead, it’s a rare slam-dunk.