Free Credit Scores To Be Required On Free Credit Reports
The financial reform bill will soon add meaning to government-mandated free credit reports by making free credit scores part of the reports. An amendment to the financial reform bill was passed in Senate on Monday that requires credit reports to include the numerical score. Since 2003, Americans are entitled to get a free credit report once a year by law. The deal never included the actual credit score.
Resource for this article: Free credit scores to be required on free credit reports
Free credit report offers for you
Free credit reports, for years, have been offered online. The internet has many scams saying they will give you free credit report offers. One site in particular, freecreditreport.com, lures consumers by offering a "free" score in return for signing up for a credit monitoring service that costs $ 14.95 a month, if they don't opt out before the end of a seven-day trial period. In April, the Federal Trade Commission started requiring websites advertising free credit reports online to disclose their bait and switch up front, and direct the many consumers to the government-approved www.annualcreditreport.com. On Sept. 1, TV and radio ads must to the same.
Get free credit scores once a year
The free credit score measure in the financial reform bill expands a law passed in December 2003 that gives consumers the right to one free credit report once a year from each of the top three consumer reporting agencies — Equifax, Experian and TransUnion. CNNMoney.com reports that the credit score covers a consumer's credit history — all debts, payment habits and jobs held. With the exception of payday loan companies, the credit score will be used by most lenders as a shortcut so it is important to monitor. 65 percent of adults haven’t checked their reports in a year according to a survey from the National Foundation for Credit Counseling. One third of adults have no idea what their credit scores look like.
More on the financial reform bill
Making free credit scores mandatory on free credit reports has little to do with the broad scope of the financial reform bill. But the New York Times reports that the adoption of the free credit score measure by an overwhelming margin underscores the keen desire by lawmakers to appease the electorate with initiatives in an election year. Senator Sheldon Whitehouse, Democrat of Rhode Island, is pushing for another amendment that gives states the right to limit credit card interest rates, regardless of where the issuing bank is located.
Are free credit scores going to make a difference?
Some feel that if consumers don’t realize that lenders use many scores to assess credit worthiness, free credit scores won’t make a difference. Boston.com reports that which version you’ll get depends on the credit bureau you go to. A company called FICO develops the most widely used scores. VantageScore has gained popularity. Ranging from 300 to 850, Equifax only gives FICO scores although TransUnion sells both to consumers. Experian gives VantageScore’s ranging from 501 to 990. Consumers often get different credit report scores issued by the different credit bureaus because there is no universal standard for the formulas they use.
Read more on this topic here
www.annualcreditreport.com
https://www.annualcreditreport.com/cra/index.jsp
CNNMoney.com reports
http://money.cnn.com/2010/05/17/news/economy/credit_score_reform/?npt=NP1
New York Times reports
http://www.nytimes.com/2010/05/18/business/18regulate.html
Boston.com reports
http://www.boston.com/business/personalfinance/articles/2010/04/02/in_the_new_world_of_credit_reports_know_whos_looking_at_yours_and_why/
Tags: free credit report, free credit report online, free credit score, payday loan companies