Free Credit Scores?

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Will We Finally Get Free Credit Scores?

Consumers Union is one of the consumer-advocacy groups that strongly endorsed new bills requiring credit scores to be included in your free, annual credit reports. These bills were introduced in both the House and Senate earlier this month.

Since January, the nonprofit organization has reached out to consumers via email and social media, urging them to ask Congress to back the bills. More than 60,000 consumers have already sent messages to their lawmakers in support of this.

Federal law guarantees you a free report every 12 months from each of the three major credit bureaus – Equifax, Experian, and TransUnion. The reports, however, do not include your credit scores.

Credit Scores Have a Huge Impact

It is no secret that credit scores have a huge impact on many Americans life and you typically have to pay to see them. Still, the credit score you pay for may not always be what your lenders see.

The Consumer Financial Protection Bureau recently found that every 4th consumer might see a score that is one tier off from what a lender would see.

That means that you, as a consumer, could see a score in the “excellent” range, while a lender could see only a “good” score.

In as many as 3% of the cases, the scores given to consumers and lenders varied wildly.

One of the reasons is that credit bureaus sell many different kinds of credit scores. Some are intended only as “educational” for consumers. Other are tailored for specific needs, like mortgages or car loans.

Even when you pay for your credit score, it is difficult to know exactly what you have paid for.

The Unfair System

A lot of people feel that the whole credit score system is cloaked in secrecy and non-disclosure. Credit reporting agencies make huge profits from controlling information about individuals.

Experian had revenue of $410 million from its consumer division for the six months ended September 30. That was up 7% from a year earlier.

Equifax’s revenue grew 13% in 2012, to $204.5 million.

Is it time for a change?

Sources: Wall Street Journal and Consumers Union.


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