Beginning later this month, if you are disqualified for a loan or if you cannot avail the best interest rates then the lender would be obliged to send a free copy to you which would contain the credit scores that were used to arrive at that decision.
This new rule will take effect on July 21st and is part of a bigger financial regulatory overhaul. This would be applicable to credit cards, student loans, and auto loans. In other words, it would be applicable on any kind of credit-related decision which uses information from your credit report. All mortgage applicants will continue to get free credit scores from lenders, even if you get the best loan terms.
However, you will not be entitled to ‘any and all credit scores’ and this is a term that is used very loosely. For example, if there is a utility that has its own ‘special utility score’ and if that score has led to a decision that requires a security deposit, then that utility need not declare the score. It is the same for insurance companies or telephone where they use special scores rather than those that are used by lenders. However, if the landlords use FICO scores and arrive at a decision that they wish to take several months’ rent well in advance, then they will have to disclose the scores that they used.
John Ulzheimer who is the president of consumer a consumer education company states that it is not applicable, unless, the lender uses the same scores to underwrite other forms of credit or loans.
The lender would have to provide the consumer free scores in case he has used this score to ‘deny’ or ‘adversely approve’ the credit which may not be extended to the consumer at the best interest rates. But if the borrower’s existing loan terms had been changed for the worse that would also entail them to get a free copy of their credit scores from the lenders along with a notice.
Although the notice might vary based on whether you had received less than perfect terms on the loan or if you were simply denied, they will still contain some of the basic information that will cover all the relevant details. For instance, it will include credit scores, factors that hurt the credit scores, the date in which the scores were created, your national ranking, the entity that provided your credit scores etc.
