The U.S. Senate voted to adopt a new amendment that would extend consumers free access to their credit scores. However the no cost access to credit is only granted in certain situations. The credit report outlines the record of paying on mortgage loans, credit cards and additional debt. Sen. Mark Udall (D-Colo.) sponsored the rule and added more legislation establishing new regulations on Wall Street financial firms, which the Senate is currently debating. It would allow consumers to obtain their credit scores for no charge from the three major credit repositories, Equifax, Experian and Trans Union, but only if the credit scores were used to make a decision that caused them to be rejected in a hiring decision. If a consumer is turned away for credit for consolidating debt or refinancing loans the lender is not required to issue a free credit report.
At this time, consumers are entitled to obtain free copies of their credit report once a year from each of the three major credit reporting companies – Equifax, Experian and Transunion. However, those reports only contain the details of the consumer’s credit history. To obtain their credit scores – which are what lenders use in making determinations of whether to extend credit and what interest rates to charge – consumers currently must pay a fee. More and more, credit scores are being used not only by mortgage lenders in deciding whether to extend credit, but in other ways as well. Employers are increasingly looking to credit scores in making hiring decisions, assuming that a higher score is an indication of how well a job candidate manages his or her personal life, and thereby is a reflection of character. It is not sure how this new legislation will impact credit repair industry.
The rule would require that consumers automatically be given their credit score if they are turned down for a loan or purchase, pay a higher interest rate on a loan or receive unfavorable terms on a credit card, or are not hired for a job due to their credit rating. “For too long, consumers have been at a disadvantage because banks and home loan lenders use these credit scores against them while they have no idea what their actual score is,” Sen. Udall said. “A person’s credit score affects the terms of home loan terms, their ability to buy a car, rent an apartment or set up a new utility account. It’s simply not fair for lenders to have access to a consumer’s all-important credit score without the consumer being given free access to it.” The original article was written by:Kirk Haverkamp.
