Free Credit Score Bill Introduced in Congress

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Wednesday, March 20th, 2013

Consumers Union’s campaign to win consumers the right to a free credit score is picking up steam in Congress. Over 60,000 of Consumers Union’s supporters have already contacted their Senators to champion the reform effort. On March 6, Vermont Senator Bernie Sanders and Tennessee Representative Steve Cohen introduced legislation in the House and Senate, the Fair Access to Credit Scores Act, that requires credit reporting bureaus to provide consumers with a free credit score once a year.

Having a good credit score is crucial in today’s tough economy. Lenders, bankers, insurers, and landlords can use these scores, many of which rate consumers on a scale from 300-900, to decide whether to extend credit as well as the interest rates to charge. Consumers often pay a fee to obtain these scores, while some register for free trial offers, only find that they are later charged for the service.

Credit reporting bureaus are taking advantage of consumers’ confusion over credit scoring by charging high fees for the sale of their credit reporting products, including for credit scores that may not even be the ones used by lenders. A Consumer Financial Protection Bureau (CFPB) study has shown that about twenty percent of consumers may receive scores that differ considerably from the ones given to lenders. While several websites offer free credit scores, it is often difficult to tell whether that score is the one that lenders will review to determine creditworthiness.

Sanders’ bill attacks the opacity of the credit scoring system by going further than demanding a free credit score. It requires that credit bureaus provide you with the credit score most likely to be used by lenders, not just an “educational score” like the ones typically sold to consumers by credit reporting bureaus.

Senator Sanders is already starting to get push-back on his free credit score bill from the credit reporting bureau Experian. Experian argues that consumers have relatively easy access to credit scores, since they can be purchased online, and because consumers can get their credit score for free if a lender turns them down for credit or charges them a higher rate because of a low credit score.

But Experian advertises fees that are significantly higher than what the FTC has determined to be “fair and reasonable,” and consumers should be entitled to a free credit score before being denied credit.

Consumers shouldn’t have to pay to find out their credit score. Experian and the other credit reporting bureaus shouldn’t be making money by selling a potentially worthless credit score to you. You deserve to know the credit score that the lender will use to evaluate you for free. Click here to join other Consumers Union activists in sending a letter to your Senators to demand your free, reliable credit score.

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