PhotoThe common wisdom is that your credit report is something you have to pay for. But that's increasingly not true. At least two Web sites are now offering not only free credit reports but also free credit monitoring to their users. For several years, consumers have been able to get one free report per year from each credit bureau but free monitoring has been hard to come by.

The latest free source of credit reports and monitoring is Credit Sesame,  which offers reports from Experian, one of the three major agencies. The others are Equifax and TransUnion.

Another site, Credit Karma, offers free credit-monitoring services from TransUnion.

Credit monitoring, as opposed to a credit report, is useful in keeping track of who's looking at your credit record and can provide an early alert to identity theft and other types of fraud.

“We believe complete financial transparency is a consumer right, which is why we worked so hard to bring free credit monitoring to consumers," said Adrian Nazari, founder and CEO of Credit Sesame. "Your credit score and information on your credit report have a very real impact on your bottom line and determine the cost of your credit and loans. Both ultimately impact your wealth and the quality of your life,”

For example, on a $250,000, 30-year fixed rate mortgage, a person with a credit score of 760 will qualify for an interest rate that is half a percentage point less than someone with a score of 699 in today’s market. This can equate to saving $20,341 in interest over the life of the loan, Nazari said.

Credit Sesame also offers free credit scores, aggregated credit information, peer comparison data, bank-level analytics and market monitoring.

Privacy policies

PhotoWhile both sites are free, they collect a great deal of information about their registered users. Although their privacy policies state that users' information is not shared with other sites, consumers should read the privacy policies carefully to be sure they understand what use will be made of their personal information.

Many Web sites offering financial information use what is known as "lead-generation" advertising, meaning that they are paid -- often generously -- each time someone clicks on a link on their site that leads to an application for a credit card, mortgage, car loan or other financial product.

The Consumer Financial Protection Bureau has begun investigating the credit agencies and is likely to impose new regulations to protect consumers. The bureau recently warned consumers that the credit score they buy from the agencies may not be the same as the score lenders use to make decisions about loans and interest rates.

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