July 8th, 2011
See Your Credit Score for Free Starting July 21! …But Only If You Apply For Credit.
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The web is abuzz with news of financial regulations going into effect this month. One in particular caught our eye:
The Fed reports that, starting July 21, creditors will be required to “disclose credit score information to consumers when a credit score is used in setting or adjusting credit terms,” when the consumer is denied for the credit.
Translation? Get denied for credit, and you’ll get to see the credit score the lender uses to deny your application.
This is great news!
We love it when the consumer gets a little help from the Fed. The Fed also mandated, back in 2003, that you’re entitled to a free copy of your credit report once a year from each of the three major credit bureaus through Annualcreditreport.com.
But now, whether you’re approved for a loan or adjustment of credit terms or not, you’ll be able to access your credit score, not just your report, so you can get a glimpse of the reasons why the lender may not have approved you or better understand why you were offered particular terms.
Score one for the consumer!
Is this enough?
Many consumers are surprised when they are denied a credit card or loan. Getting access to your credit score after applying for credit or a loan is great, but it’s not enough.
In fact, it’s a good idea to monitor your credit before you decide to apply for a mortgage, car loan, credit card, or anything else, and to continue to check and update your credit score every few weeks. Keeping up-to-date with your credit health will help you keep building your credit score and avoid pitfalls.
Think of it this way: Say you’re approved for a mortgage loan, and you accept it, but you’re disappointed you didn’t get a low interest rate. When you ask to see your credit score, you discover that your score is lower than expected. By monitoring and improving your credit before applying for that loan, you can better prepare and build your credit so you can get approval and the best rates. Making your credit score work for you—especially in money-saving opportunities—means being proactive about staying informed about your credit.
Here at Credit Karma, we believe that free access to your credit score and report is a fundamental consumer right, and that’s why we’ll always let you check your credit score for free, everyday. Not only that, but you can also get a bigger picture of your credit report through the Credit Report Card.
Bottom Line: While this will be a win for consumers, remember that you already have the credit resources at hand now to keep an eye on your credit today.