SECURE Act aims to help protect consumers from credit score gotchas

By Maureen Mahoney on Thursday, April 17th, 2014

These days, lenders and others rely heavily on credit scores to make a quick assessment of a consumer’s creditworthiness. But, vulnerable consumers can find themselves tricked into paying more than they had planned, just to find out their own credit scores.

In our new policy brief, “Errors and Gotchas: How Credit Report Errors and Unreliable Credit Scores Hurt Consumers,” we share the stories of consumers who found themselves out of luck when they tried to purchase a reliable score or obtain one for free online. Some consumers told us they were trapped into paying for expensive credit-monitoring programs when they tried to get their scores online.

That’s exactly what happened to Amber and her husband, from Paducah, Kentucky. Amber shared their story with Consumers Union:

“A couple years ago my husband and I were looking into buying a new vehicle and he was curious as to what his credit score actually was! He had found a free credit score ad and it was free until about 30 days later when they withdrew $40 out of his checking account. At the time he was unemployed and it made our bank account go into the negatives, which of course then charged us a $35 fee on top of our negative checking account! My husband would call and we would think it was all okay but then it would withdraw more money from our account. This happened several times until finally it took my husband having to get a little ugly and then the issue was resolved!”

Amber’s husband ended up paying a monthly fee and overdraft fees, and dealing with the hassle of getting the charges cancelled, just for trying to find out his credit score for free.

Furthermore, the scores provided by credit bureaus through the credit-monitoring services aren’t always as reliable as advertised. Some consumers told us that the scores they got weren’t the same scores their lenders looked at when deciding whether to extend them a loan. And the Consumer Financial Protection Bureau (CFPB) showed that “educational” scores would place about one in five consumers in a different credit-rating category than a score purchased by a lender.

Consumers shouldn’t be tricked into paying hefty fees every month just to see their credit scores. They deserve to be able to obtain them from a trustworthy source for free, just as they can their annual credit reports. And the scores should be the same ones used by lenders when gauging creditworthiness.

Fortunately, a new bill in Congress, the Stop Errors in Credit Use and Reporting (SECURE) Act, would give consumers their credit scores for free when they request their free annual credit reports. If passed, the bill would provide consumers a secure, easy way to obtain a reliable credit score online. The bill would also obligate credit bureaus to follow strict requirements to maintain accuracy and would help consumers who find mistakes on their reports.

Consumers Union strongly supports this bill, and encourages consumers to lend their support as well. In addition, check out our consumer tip sheet for advice about checking your credit history and accessing credit scores. If you’ve ever been tricked into signing up for a pricey credit monitoring program when trying to get your credit score, please share your story!

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