USA: For decades, the big three credit reports agencies, Equifax, Experian and TransUnion, denied consumers access to their credit histories, selling date only to lenders. Due to the Fair and Accurate Credit Transactions Act of 2003, each of them must supply every consumer with one free credit report a year. This is available only at AnnualCreditReport.com, run jointly by the big three. Be careful not to mistype this address.

While meeting this minimum requirement, the big three energetically tap online shoppers for $100s of extra revenue and profit by selling credit date via websites using ‘free credit report’ and ‘free credit score’ to sign up for ‘credit monitoring’, their cash cow. Experian sells to consumers at Experian.com and six other sites. Don Girard of Experian calls this ‘creative marketing.’ TransUnion, owned by billionaire Pritzker family of Chicago, operates TransCredit.com and TransUnion Interactive, which in turn sell consumer products by dozens of independently run websites, like free-credit-reports.com, FreeCreditReportsInstantly.com, PrivacyMatters.com, speedycreditreports.com, SpendonLife.com, says spokesman Steve Katz.

Only Equifax sells mainly through their own website, Equifax.com. ‘Our approach has always been to take the high road’, says Steve Ely, their president.

The big three don’t apologize for how they sell. The biggest, Experian’s, spokesman Girard says, ‘We’ve been averaging about 20% growth in our direct-to-customer business, year over year. That’s due to happy consumers.’ But their subsidiary Consumerinfo.com was fined twice by the Federal Trade Commission: in 2005 August, they paid $950,000 in fines, and in 2007 February, another $300,000, neither time admitting any wrongdoing, but agreeing to post disclaimers on all their websites. They put their disclaimer in light blue lettering on dark blue background next to a large, bright orange ‘order now’ button for the credit monitoring ‘service’.

So beware of ConsumerInfo.com, FreeCreditReport.com, Free3BureauCreditReport.com, PrivacyMatters.com and other similarly named websites touting ‘free trial’ and ‘package deal’ offers if you subscribe to a ‘credit monitoring’ service alerting you each time a lender checks your credit history. ‘The word “free” is used so freely that it really has no meaning in the context of these types of sites’, says Robert Mayer, University of Utah professor who analyzes such sites for Consumer Reports WebWatch. These sites all sell information supplied by the Big Three.

Now a turf war grows between the big three and Fair Isaac, which supplied the formula for calculating FICO, the score lenders most often purchase from bureaus to determine a loan applicant’s credit worthiness. The big three starting offering an alternate score, VantageScore, based on an algorithm they contrived. By pooling data, they say they have a scoring tool more accurate than FICO, and they whittle away at Fair Isaac’s long dominance in credit-scoring markets. Experian and TransUnion send VantageScore and others scores of their own to consumers who don’t know this differs from their FICO scores. If you try to buy your score from Experian or TransUnion, you’re generally don’t buy your FICO score, but rather VantageScore or Experian’s Plus Score or TranUnion’s TransRisk score. The only place people can buy their FICO score is at Fair Isaac’s consumer website, myFICOscore.com, or at Equifax.com.

Warning: ‘Typo Squatters’, to capture visits from Web users mistyping official web addresses, set up web pages with Internet addresses slightly varying from official site names. They then route visitors to other websites selling credit services. They usually lack privacy policies and contact information, says World Privacy Forum. One such site was taking Social Security numbers to sell to other companies.

RETIREMENT:
Consider: Only 16.9% of all American retirees get corporate pensions, so they must live on savings. Bond interest rates are low, so they probably can’t live on bond savings. Inflation of 3%/year will erode pensions by 24% in ten years. Life spans grow—an average 65-yaar-old woman can expect to live to nearly 87, and the equivalent man to 84. About 58% of all couples aged 65 will have one partner live to 90, and 28% will have one partner live to 95. These are merely averages.
If you invested $1 million in bonds in 1977, then withdrew 6% of the account eh first yea rand raised that amount each year by the % gain in the consumer price index, your account would empty by 1998. If you invested in shor-term Treasury Bills, you’d go broke in the same amount of time. An account invested in stocks would have grown to $12 million in 30 years, even with withdrawals.
This is not a guarantee—if you had retired in 1972, with same scenario, you’d have gone broke in 1985 because the market fell.
Therefore:
1. If you retire young and so your retirement might be long, you might want to leave more of your retirement funds in stocks—say 50% in stocks, 50% in bonds if you retire at 65. Not too much in volatile stocks—cut back on risk. But don’t put ALL in bonds.
2. Don’t take out all the money in January that you expect to spend that year—doing so loses the interest on those funds.
3. Keep a simple life. Costs down. Withdraw only maximum of 4% or 5% per year.
4. Don’t overtrust financial advisers supplied by employer at retirement parties. These advisers claim to be able to fund early retirement if the workers will invest in high-return, high-commission funds. Now regulators are fining brokerage houses who exaggerate returns. So don’t retire too early. Some people have simply assumed that their retirement funds would mature rapidly every year, have quit their jobs, have spent heavily in a retirement home, have seen a downturn in the market hit their retirement funds, have had to return to work at far lower salaries than they had before.
5. Remember health care costs can be higher as you get older, so save extra.
6. Thinking you can make as much from returns alone as you can from working means either a very large investment or an unrealistically high expectation of return. Average long-term return is 10.4% when all returns are reinvested, 6% for more conservative instruments, say bonds. Thinking you can withdraw 9%/year and never run out is unrealistic and will probably deplete your fund, says the Financial Industry Regulatory Authority.