Federal Reserve Produces New Online Credit Report Guide for Consumers
Following on from an overhaul of the consumer-protection regulations, a new U.S. government Q&A guide complements the new rules that are set to take effect in January.
Creditors must now provide consumers with a “risk-based pricing notice” if they are offering applicants less favourable credit terms than they offer to other consumers, based on their credit rating. The idea is that consumers will be encouraged to access their free credit report and make any changes to correct errors. The online guide tells consumers how to request their credit report, what their score means, and how to rectify any mistakes. Once mistakes have been corrected, applicants should be offered more favourable loan terms
Consumers can access a free copy of their credit report from each of the three national credit bureaus once per year. If they find mistakes, they need to contact the appropriate bureau to raise a dispute, and then wait for a response, which can take up to 30 days.
Critics claim that the problem isn’t with the credit regulations being introduced, but with the credit reports themselves, which are often riddled with errors, and getting changes made to one’s credit score can be difficult.
The rules were agreed by Congress in 2003, but will finally be implemented this year as part of an overhaul of financial regulations called the Frank-Dodd Act.
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