The financial reform bill will soon add meaning to government-mandated free credit reports by making free credit scores part of the reports. Approved by the Senate on Monday was an amendment to the financial reform bill that calls for credit reports to include a numerical score. By law, Americans are entitled to free credit reports at least once a year given that 2003. The deal never involved the actual credit score.
Offers of free credit report
Free credit reports online are available for years. The internet has numerous 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 the numerous consumers to the government-approved www.annualcreditreport.com. On Sept. 1, TV and radio ads must to the very same.
Get free credit scores once a year
The free credit score measure within the financial reform bill expands a law passed in December 2003 that gives the right to one free credit report once a year from each of the top three consumer reporting agencies for each individual– Equifax, Experian and TransUnion. CNNMoney.com reports the credit score covers a consumer’s credit history — all debts, payment habits and jobs held. Except for payday loans companies, the credit score is widely used as a shortcut by most lenders, so monitoring it is crucial. A survey from the National Foundation for Credit Counseling said 65 percent of adults haven’t checked their reports in a year. One third of adults have no idea what their credit scores look like.
The financial reform bill extras
Making free credit scores mandatory on credit reports doesn’t really have much to do with the bill. But the New York Times reports 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 trying to get an amendment that gives states the right to limit credit card interest rates, regardless of where the issuing bank is located.
Is a difference going to be made with free credit scores?
Numerous experts are worried that free credit scores won’t really make any difference. Boston.com reports that what you get will depend on the credit bureau you go to. A company called FICO develops one of the most widely used scores. VantageScore is kind of popular. TransUnion gives both to consumers although Equifax only gives FICO scores ranging from 300 to 850. 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.
A lot more info 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/
