Required On Free Credit Reports Are Free Credit Scores
The financial reform bill will soon make free credit reports require free credit scores as part of it. 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. But the actual credit score, which is the only information in free credit report offers that lenders would care about, hasn’t been part of the deal.
Article Source: 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, offers a “free” score in return for signing up for a credit monitoring service that will cost $ 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 began requiring websites advertising free credit reports online to disclose their bait and switch up front, and direct consumers to the government-approved www.annualcreditreport.com. Radio and TV ads have to do the same starting Sept. 1.
Get free credit scores once a year
The free credit score measure in the financial reform bill expands a law that was actually 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 entire credit history — all debts, payment habits and jobs held. The credit score is widely used as a shortcut by most lenders, except payday loan companies. 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 don’t know what their credit scores actually are.
More on the financial reform bill
The bill doesn’t have much to do really with making free credit scores mandatory on free credit reports. 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 pro-consumer 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.
Will free credit scores make a difference?
Some experts are skeptical that free credit scores won’t really make a difference if consumers don’t realize that lenders use multiple scores to assess credit worthiness. Boston.com reports that which version you’ll get depends largely on the credit bureau you go to. The most widely used scores are developed by FICO. VantageScore is kind of popular. Ranging from 300 to 850, Equifax only gives FICO scores although TransUnion sells both to consumers. Ranging from 501 to 990, Experian sells VantageScore’s. There is no universal standard for the formula they use which is what gives different credit report scores.
Find more information on this topic
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/
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