Free access to credit scores on the horizon

The massive financial reform bill passed by the Senate last week doesn’t just impact Wall Street. The bill, awaiting reconciliation with the House version, touches every day consumers affected by credit.

With the approval of an amendment to the bill proposed by Sen. Mark Udall (D-Colo), many could soon have free access to their credit score. Since December 2003, consumers have been able to get their credit report for free once a year from annualcreditreport.com. Georgia residents have additionally been entitled by the Fair Business Practices Act to two free credit reports from each reporting agency per year.

However, despite the craftily worded advertisements for “free” scores that come with a $14.95 credit monitoring service subscription, there was no way to get your credit score without paying for it. With the passage of the Fair Access to Credit Scores Act, anyone denied insurance, loan or utilities or given unfavorable terms based on their credit score and report can get free access to the score used as a determining factor.

“I believe it’s only fair to allow consumers access to their credit score when it is used against them to deny credit, require a higher interest rate on a loan or prevent an applicant from being hired for a job,” said Sen. Johnny Isakson (R-Ga) in a statement. Employers often use credit reports, but do not have access to credit scores.

According to a National Foundation for Credit Counseling survey, 31 percent of people do not know their credit score. The doors have not swung wide open, but for people negatively impacted by the score — a shortcut used by lenders rather than digesting the details of a credit report — knowing how a score affected a lender or insurance company in its decision is important, said John Ulzheimer with Credit.com.

“The score has become the most important component of underwriting,” Ulzheimer said. “Not only does this make common sense, it’s very timely when lenders are making it more difficult to get a loan.”

Consumers could potentially know how close they are, for instance, to getting a prime rate on a loan.

Udall told the Denver Post after the vote: “It’s simply not fair for lenders to have access to a consumer’s all-important credit score without the consumer being given equal access at no cost. My common-sense amendment will help restore some fairness to hardworking Americans who want every opportunity to improve their financial futures.”

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12 comments Add your comment

Jane

May 25th, 2010
8:45 am

Morrus has no life. He makes the same post over and over and over….

Cutty

May 25th, 2010
8:54 am

…and yet he makes more since than 3/4ths of the posters on these blogs with the same post.

Ted Striker

May 25th, 2010
9:00 am

Good info, Rana

Reader

May 25th, 2010
9:54 am

I really wish they would do away with using credit reports by employers. It’s so unfair. Working in the financial industry, I can understand. By why does it matter when you’re applying to work for the TSA? Do they think you’re going to steal somebody’s credit to make your credit better? Makes no sense.

dano

May 25th, 2010
10:23 am

I personally think that your credit score says a lot about your character but I also believe that you should have equal access to any potential employers “credit score” so you know exactly the financial health of the company your considering working for. Taking it a step further you should also have access to physiological test results of officers of the company if your required to take a physiological test as a condition of employment seems only fair.

Makes Sense

May 25th, 2010
10:32 am

Dano, I agree!!

Reader, while I agree it is unfair but it does give insight to how responsible the person is. Sad but TRUE! If your credit is jacked up, then that may mean that you have issues with managing your life & who knows WHAT you may end up doing @ your job..

Anne

May 25th, 2010
10:34 am

Seriously, do you people KNOW who Clark Howard is? Do you not listen to him? I’ve known this site for at least the last 5 years because he always talks about it and your credit scores.

Mimi

May 25th, 2010
10:52 am

It’s a sad day and time when one’s credit score is used to determine one’s character. It’s easy to sit in judgment when you’ve never experienced a layoff, loss of a spouse or illness or always had easy access to cash. However, since these are the times we are living in I am happy to hear that soon all consumers will have true free access to their credit scores. Thanks, Rana!

shannon

May 25th, 2010
10:34 pm

Anyone who thinks a credit score is a representation of someones character is foolish. I file bankruptcies for people everyday at my firm and many because of the economy have gotten behind on bills that up to the point of job loss have always paid on time.. Its sad that people are this critical of someone.. What happened to checking into someones background, or job references.. Just my opinion..

say what?

May 25th, 2010
11:17 pm

Using credit scores to determine if a person is eligible for a job is crazy. Just the same as red lining an entire neighborhood because renters with average credit move in to re-establish themselves, but the insurance company increases your homeowner and car insurance rates. How many of us have control over other people’s credit and if they can live in your zip code?

Then to, for national security purposes why don’t we do away with these credit bureau companies as NONE of them are US owned anylonger. all of our SSN,DOB, relative contacts, everything in the hands of companies that our government can have little scrutiny.

[...] job,” said Sen. Johnny Isakson (R-Ga) in a statement. Employers often use credit reports, but do not have access to credit [...]

ishmeil washington

May 26th, 2010
2:36 am

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