The financial reform bill will soon make free credit reports require free credit scores as part of it. An amendment to the financial reform bill was passed in Senate on Monday that requires credit reports to include the numerical score. Americans have been entitled by law to receive a free credit report once a year since 2003. The actual credit report has never been part of the deal.
Article Source: Free credit scores to be required on free credit reports
Free credit report offers
Free credit reports, for years, have been offered online. The Internet is infested with scams disguised as 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 started requiring websites advertising free credit reports online to disclose their bait and switch up front, and direct consumers to the government-approved www.annualcreditreport.com. Radio and TV ads have to do the same starting Sept. 1.
Get free credit scores once a year
The free credit score measure in 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 every individual– Equifax, Experian and TransUnion. CNNMoney.com reports that the credit score covers a consumer’s credit history — all debts, payment habits and jobs held. The credit score is widely used as a shortcut by most lenders, except payday loan companies. 65 percent of adults haven’t checked their reports in a year according to a survey from the National Foundation for Credit Counseling. One third of adults have no idea what their credit scores look like.
More on the financial reform bill
Making free credit scores mandatory on credit reports doesn’t really have much to do with the bill. But the New York Times reports that the adoption of the free credit score measure by an overwhelming margin underscores the keen desire by lawmakers to appease the electorate with 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.
Are free credit scores going to make a difference?
Many experts are worried that free credit scores won’t actually make any difference. Boston.com reports that which version you’ll get depends largely on the credit bureau you go to. The most widely used scores are developed by FICO. VantageScore has gained popularity. TransUnion sells both to consumers, but Equifax only sells FICO scores, which range from 300 to 850. Experian sells VantageScore’s, which range from 501 to 990. There is no universal standard for the formula they use which is what gives different credit report scores.
Read more on this topic here
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/
