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Free credit scores are available more easily

By Faye Mergel
Published: Saturday, December 25th, 2010

06Consumers can get ready for the first financial gift of the New Year. Now customers have a right to see one of the most important aspects of credit which is their credit history. It is very important for the customers to understand that this credit score as well as the credit history is a measure of their creditworthiness as far as the lenders are concerned. Thanks to the latest federal regulation which has come into effect, credit card issuers and also the other lenders have to provide millions of the applicants with the right reasoning that led them to fix the interest rates that they charge on the customers. Therefore if a customer gets a higher interest rate compared to other customers, then the individuals have the right to find out why they didn’t get the same deal as all the others.

The bottom line is that for the first time, customers actually have a legal right to find out why they didn’t get a particular loan that they applied for or even if they did why the interest rate is higher than the best deals on offer. This will give the customer a great chance to set things right in order to ensure that they qualify for the best deal the next time around.

As with many of the customer legislations that have been passed in the last couple of years, this rule too offers a lot more information to consumers who are especially to keen to find out what is wrong with their credit history and correct it. The regulation is actually a belated measure from an earlier law that had mandated credit card issuers to provide all information to consumers in case of a pricing which is risk based. The credit report or the credit score of the consumer could also be provided as an alternative.

Interestingly the concept of pricing versus risk is an interesting one and a lot of companies find it hard to explain it to the customers. Therefore they choose for the easier option which is to provide the credit report to the individual. In fact that is what a lot of companies are trying to do in order to avoid having to provide risk based pricing notice which is quite intricate to say the least. The FICO score is the more popularly used indicator of the creditworthiness of the individual and helps companies to approve an application.

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