Certain US consumers will soon know a lot more about their creditworthiness, and that power could create competitive and compliance headaches for lenders. An amendment approved Monday to the Senate regulatory reform bill would give consumers free access to their credit scores if they are denied a loan, receive unfavorable terms on one, or if they are otherwise hurt because of poor credit (turned down for a job or an apartment, for example). This goes a step beyond a regulation scheduled to take effect next year, which is expected to nudge lenders to disclose scores to consumers who receive inferior loan terms. Under the Fair Credit Reporting Act, consumers can already access their credit reports once a year free of charge. But the reports only include a consumer’s payment history, not the score that lenders use in their decision-making process.
The three major credit bureaus – Experian PLC, Equifax Inc. and TransUnion LLC – and Fair Isaac Corp., offer consumers access to their credit scores for a fee. Allowing some consumers to bypass these services means, among other things, that there will be more demands on lenders to explain to borrowers why their credit score fell below the mark. Source: Insurance Network