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Re-activateThe Senate yesterday approved an amendment in the financial reform bill to give consumers and job applicants adversely affected by their credit histories access to their credit scores. The amendment, proposed by Sen. Mark Udall (D-Co.), is a step in the right direction. Too bad it doesn't go further.
If made law, the amendment would require the score to be provided by lenders or potential employers when the consumer is denied credit, is required to take a higher interest rate than anticipated, or isn't hired due to his or her credit score. Read Ron Lieber's blog at NYTimes.com on how the system would work.
Currently, all consumers are entitled to a free, annual copy of a credit report from each of the three major credit reporting bureaus—Equifax, Experian, and TransUnion. (We highly recommend you do this, using the government authorized Web site, www.annualcreditreport.com.)
But your credit score—a number from 300 to 850 that incorporates your credit history from the three bureaus, isn't free. Typically, it costs about $16.
The score affects the interest rates you'll be offered for a credit card, mortgage, auto loan, and other types of credit. Consumer Reports noted recently that an "insurance-based credit score," which includes some but not all components of a traditional credit score, can have an impact on what you pay for homeowners insurance. (If you'd like to know how to improve your score, check out our article on dealing with 13 different factors that can affect your credit score.)
Michael Riley of The Denver Post reports that Udall originally proposed that all consumers be given the free access their credit score once a year, but couldn't get the backing of his fellow Democratic lawmakers. Considering the enormous influence of the credit score, it's too bad Udall didn't prevail.—Tobie Stanger
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