Keep Watch on Your Credit Report -- Free

Under the terms of a national class-action lawsuit 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 must have had any form of open credit account -- a charge card, student loan, auto loan or mortgage -- at any time between Jan. 1, 1987, and May 28, 2008.

An estimated 160 million Americans meet that standard, although you must sign up by Sept. 24 to take advantage of the settlement.

The free service 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 sharply depress their credit scores.

That, in turn, could make it tougher for them to obtain the best rates in today's market, in which lenders are demanding higher credit scores for their standard rates and often won't deal with 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.

Here's a quick overview of the class action and how it might be valuable to you. Under the terms of a settlement agreed to by TransUnion -- one of the three dominant credit repositories -- you can visit a special Web site ( http://www.listclassaction.com) or call a toll-free number (866-416-3470) to register a claim.

The litigation against TransUnion dates to 1998, when plaintiffs charged that the company sold consumers' personal data to marketers in violation of federal law. Sixteen class-action suits from around the country were consolidated into a single case against TransUnion in U.S. District Court in Chicago.

TransUnion denied all wrongdoing, but as part of the settlement agreed to create a $75 million fund to compensate affected class members. Because the class was defined as almost anyone who had an open credit account any time during the past 21 years, there's a good chance you're a member.

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

· Nine months of free credit file monitoring service if you agree not to file an individual lawsuit against TransUnion seeking damages. In addition to monitoring -- in which the bureau alerts you by e-mail within 24 hours of any significant change in your credit data -- you can also lock your 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.

One downside for mortgage applicants: The credit score you receive from the settlement agreement will not be a FICO score, the dominant score used by mortgage lenders, which is calculated by Fair Isaac Corp. It will be TransUnion's proprietary score, which may be roughly comparable to your FICO score but sometimes can differ substantially.

The key value of the settlement options is the unlimited access you can get to your credit file, with none of the usual costs. Plus, with the monitoring service, you'll be able to spot any monkey business in your files, such as identity theft or unauthorized use of your credit cards.

Think of this remarkable 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, this is a rare opportunity.

Kenneth R. Harney's e-mail address is KenHarney@earthlink.net.