According to the latest changes in legislature, free credit scores could be soon in the mail. It will be required from the lenders to provide credit scores automatically to the borrowers who are not given the most desirable interest rate or are denied a cash advance.
The rule is scheduled to become effective in July 21 and the main intention of the measure is to inject some transparency into the process of making decisions and determination of loan terms.
Several Scores From Three Credit Bureaus
In fact, any potential borrower has several credit scores as each of three credit bureaus – TransUnion, Experian and Equifax – performs its own credit score. Following the new rules, the lenders will have to provide only the score that was used for making credit decision. Besides, it will be required from the lenders to indicate the range of possible credit scores. As a result, the borrowers will have a sense of where they stand.
The new rule doesn’t guarantee that anyone will be able to get a free copy of personal credit score. Borrowers can receive it only in negative situations. In addition, credit scores shouldn’t be confused with credit reports.
The given measure actually closes a loophole in the regulation that became effective in January. According to the previous rule, the lenders had a choice in the way of providing the disclosure. One of the options allowed lenders of advance loans to provide a simple letter that informed the borrower that he/she wasn’t given the best rate due to the credit risk.