Credit Scores
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Fully free credit scores long overdue

by Broderick Perkins

Consumers Union has launched a letter-writing campaign to get Congress to really free up credit scores, just as it has legislated free credit reports.

The publisher of the independent and well-respected Consumer Reports, CU offers the "Know Your Credit Score" campaign with an online, pre-written form letter that only requires that you to fill in your information. You can customize the letter, or produce your own, but based on your Zip Code, the letter is then sent to your U.S. Representative and Senators

"Consumers won the right to a free copy of their credit reports nearly a decade ago by bombarding Congress with hundreds of thousands of messages. Now, it's time you have the right to free credit scores," CU's campaign implores.

Anyone can get three free credit reports every year, one each from Experian, Equifax and TransUnion, through AnnualCreditReport.com.

Your credit report is a history of your credit use behavior. Your credit score is a numerical rendition of your credit worthiness based on information on your credit report.

Credit reports and credit scores are widely used in the mortgage application process to determine both your ability to pay the debt and the likelihood you won't default. Scores are also used by insurance companies, property managers, even some employers.

While your credit report is free, your credit score isn't except under certain circumstances.

If you apply for credit and the lender uses what's called "risk-based pricing" and you get approved for credit, but at less than the best terms, the lender has two options, based on rules effective Jan. 1, 2011, as part of the Fair and Accurate Credit Transactions (FACT) Act of 2003, which amends the older Fair Credit Reporting Act (FCRA).

• Lenders can send you a Risk Based Pricing Notice which explains that your credit report was used to set your credit terms. It also explains where to get a free credit report and it reminds you to check your credit report for errors that could have caused the decision. It does not contain your credit score.

• Lenders can send you a Credit Score Disclosure Notice which says your credit score was used to make the lending decision, the date that score was accessed and the credit reporting agency used in the decision. This notice includes your credit score, it explains how your credit score compares to others and it tells you how to get your credit report. If credit is secured by residential property, the notice will also provide up to five factors that adversely affected your credit score.

Lenders also can send the Credit Score Disclosure Notice to all approved applicants, no matter what terms the lender granted.

"But you typically can't get your score for free. You might pay fees, hand over your credit card for sketchy "trial offers," or buy credit scores that some lenders may not even use.

Consumers Union is making it easy to appeal to Congress for free credit scores because it knows it'll take a massive consumer letter lobbying effort to free up credit scores.

The credit reporting industry has a long history of keeping consumers blind to their own personal credit report information and only reluctantly gave up free credit reports.

"The three major credit reporting agencies that give us free credit reports can simply give us our credible and trustworthy free scores at the same time. But it will take pressure on federal policymakers to make that happen. Let your leaders know you want to Know Your Score," CU says.

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