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Published: April 2010

Consumers deserve free access to credit scores with credit reports

Coalition: Credit reform

Consumer Action joined its coalition partners in sending a letter to Senator Mark Udall asking him to support an amendment to the Fair Credit Reporting Act which would require credit reporting agencies to give consumers free access to their credit scores when they obtain their free annual credit report.

Below is an excerpt from the letter: The Consumer Federation of America (CFA), Consumer Action, Consumers Union, National Consumer Law Center, National Council of La Raza, and U.S. Public Interest Research Group support the Fair Access to Credit Scores Act, which would amend the Fair Credit Reporting Act (FCRA) to require credit reporting agencies to give consumers free access to a credit score when they receive their free annual credit report. Credit scores have a large financial impact on consumer access to credit and other services such as insurance and utilities. Knowledge about and access to credit scores is an invaluable tool for consumers in these tough financial times.

Credit scores are no longer used just for determining access to or the interest rate on a mortgage loan or a credit card. Credit scores can have a wide ranging affect on the ability of consumers to obtain rental housing and phone and internet service. Although credit scores have broad financial implications, only 36 percent of respondents had checked their credit score in the last 12 months, according to a survey conducted by the Financial Industry Regulatory Agency (FINRA) in December of 2009. In a survey conducted by CFA in 2008, respondents who had obtained their credit scores knew more about credit scores and their impact on access to credit and services than consumers who did not know their score.

For instance, 65 percent of respondents who knew their score also knew that maxing out a credit card lowers your credit score: in comparison just 51 percent of other respondents knew this important fact. Furthermore, using data supplied by Argus Information and Advisory Services, it was estimated that consumers could reduce card finance charges by $105 annually by raising their credit score by just 30 points. If all consumers raised their scores by 30 points, total annual consumer savings would be an estimated $28 billion.

Ultimately, credit reporting agencies should be required to provide consumers with free access to their actual credit score once a year. This bill leaves in place a weakness in the existing law which allows the credit reporting agency to choose to provide either a real score used by creditors or an “educational” score. However, the bill is still an important first step in providing consumers with essential information that affects their financial opportunities, the cost of credit, and the availability of some types of services. Consumers deserve to know not just what is in their report, but also their credit score.

Lead Organization

Consumer Federation of America

Other Organizations

Consumer Federation of America | Consumers Union | U.S. Public Interest Research Group | National Council of La Raza | National Consumer Law Center (On behalf of its low income clients) | Demos

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