Credit card companies are being pressed by the top U.S. consumer watchdog to provide free credit scores to card customers.
Richard Cordray, director of the Consumer Financial Protection Bureau, maintains that consumers who monitor their credit are less likely to become delinquent and default on bills and more likely to try to improve their credit scores.
Credit history impacts many aspects of our lives – whether or not we qualify for mortgages and credit cards and how much interest we’ll pay, our insurance rates, whether we’ll be able to rent a home and sometimes whether we land a job – but “lenders are currently only required to provide scores to customers if they deny them credit, give them less favorable rates than the customer applied for or hike their rates,” CNN Money says.
Cordray sent a letter to the nation’s biggest credit card issuers earlier this month, strongly encouraging them to provide free credit scores to their customers on a regular basis – either on a monthly statement or online, as well as educational information on how credit scores are used, The Wall Street Journal reports.
Cordray said the CFPB has received more than 30,000 complaints about credit reporting. About 75 percent of consumers have reported inaccuracies in their reports. Without the regular review of credit reports and scores, consumers are at risk of not noticing mistakes and even identity theft.
Americans are entitled to a free credit report once a year from each of the three major credit bureaus through AnnualCreditReport.com, but the Consumerist says only 1 in 5 take advantage of the free offer.
As we’ve told you, Discover Financial Services, Barclaycard US and First Bankcard already provide free FICO scores to their customers. FICO says it’s working with other lenders to provide the same free service.
This is a long-awaited step in the right direction. Everyone should have easy, free access to their credit score.
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