NEWS | Aug. 17, 2011

Lenders must send consumers credit score

By Paul Richard President - Executive Director, Institute of Consumer Financial Education

A new rule benefiting borrowers began July 21. Now, consumers will get an explanation when they don't receive the best interest rate or are turned down on a student loan, automobile loan or credit card application.

This new regulation requires lenders to send the applicant a free copy of the credit score it used to arrive at its decision. The new Consumer Financial Protection Bureau will enforce these new rules and the ruling only applies to lenders.

Consumers will now get a clear picture of how they are judged by lenders. The lender's disclosure notice must provide the credit score and the factors that pulled down the credit score and where the score ranks nationally. The notice must also give the major factors that decreased the credit score such as late payments or maxing out credit cards. It will also explain how to get a free copy your credit report.

There are a few stipulations. If a utility, telephone company or insurance agency has a special scoring system, it does not have to provide a free credit score. Also, if a borrower received the best terms and lowest rates, they may not receive a free score.

The Airman & Family Readiness Center can also provide a one-time free credit report and score. Call 963-4406 to set up an appointment.