Business & Finance Credit

How the New Free Credit Score Disclosure Rules Help You

A new Federal law went into place July 21, 2011 that provides tremendous help to consumers trying to improve their credit score and especially those who had no idea they need credit repair.
The new rule requires lenders and credit issuers to give a free credit score to applicants who are turned or those who are approved, but for less favorable terms, e.
a higher interest rate or annual fee.
Before this rule, applicants were given the chance to view a free report, but only when they were turned down and only when they requested the report.
The free score will be sent automatically - no action is required on the part of the applicant.
Not only do consumers get their score, they get a list of four factors that are affecting their scores.
These reasons give a lot more meaning to the score and help consumers know exactly what they should focus on credit repair.
Often, it's hard to know where to begin because you're only speculating as to what's hurting your credit score.
With the new credit card disclosure, you get specific reasons why your score isn't at it's best.
You can use the information to decide what credit repair actions you need to take.
If you've already started credit repair, the new disclosure can help you gauge whether your actions are in vain.
For example, you may be focused on removing negative information from your credit score, but your level of debt could be hurting your score.
In that case, you should switch your efforts to paying down your credit card and loan balances.
Keep in mind there may be some differences in the credit score you normally check and the one the lender or card issuer uses, especially if you check your credit score against one credit bureau report and the lender's score is based on your information with another bureau.
There are lots of scores out there.
Not only can they vary by provider, they also vary between credit bureaus.
The credit score disclosure can shed some light on what score your preferred lender uses.
What Not to Do It's probably not a good idea to apply for a credit card just so you can get a free credit score.
The extra credit report inquiries will actually hurt your score on top of anything else that's already affecting your credit.
Instead, apply for credit as needed and consider the free score a bonus.
You May Not Get a Free Credit Score If...
There are a few loopholes in the law and you may not get a credit score at times, even if you're denied or approved with a higher interest rate than other applicants.
For example, if the bank uses their own proprietary score, they're not required to send it to you.
Insurance companies use a scoring model that's based on your credit history, but isn't exactly a score, so you won't get that score for free.

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