Free credit scores to be required on free credit reports

a before and after comparison of credit reports, highlighting credit scores

The Senate passed a "free credit score" amendment to the financial reform bill. It requires credit scores be included in free credit report offers. Flickr photo.

The financial reform bill will soon add meaning to government-mandated free credit reports by making free credit scores part of the reports. An amendment to the financial reform bill requiring that credit reports include the numerical score was approved in the Senate on Monday. Americans have been entitled by law to receive a free credit report once a year since 2003. But the actual credit score, which is the only information in free credit report offers that lenders would care about, hasn’t been part of the deal.

Free credit report offers

Free credit reports online have been available for years. The Internet is infested with scams disguised as free credit report offers. One site in particular,, lures consumers by offering a “free” score in return for signing up for a credit monitoring service that costs $14.95 a month, if they don’t opt out before the end of a seven-day trial period. In April, the Federal Trade Commission started requiring websites advertising free credit reports online to disclose their bait and switch up front, and direct consumers to the government-approved TV and radio ads must do the same starting Sept. 1.

Free credit scores once a year

The free credit score measure in the financial reform bill expands a law passed in December 2003 that gives consumers the right to one free credit report once a year from each of the top three consumer reporting agencies — Equifax, Experian and TransUnion. reports that the credit score covers a consumer’s entire credit history — all debts, payment habits and jobs held. Except for pay day loan companies, the credit score is widely used as a shortcut by most lenders,  so monitoring it is crucial. Yet a recent survey from the National Foundation for Credit Counseling found that some 65 percent of adults have not checked their reports in the past year. Nearly one-third of adults don’t know their credit scores.

More on the financial reform bill

Making free credit scores mandatory on free credit reports has little to do with the broad scope of the financial reform bill. But the New York Times reports that the adoption of the free credit score measure by an overwhelming margin underscores the keen desire by lawmakers to appease the electorate with pro-consumer initiatives in an election year. Senator Sheldon Whitehouse, Democrat of Rhode Island, is pushing for another amendment that gives states the right to limit credit card interest rates, regardless of where the issuing bank is located.

Will free credit scores make a difference?

Some experts are skeptical that free credit scores won’t really make a difference if consumers don’t realize that lenders use multiple scores to assess creditworthiness. reports that which version you’ll get depends on the credit bureau you go to. A company called FICO develops the most widely used scores. VantageScore has gained popularity. TransUnion sells both to consumers, but Equifax only sells FICO scores, which range from 300 to 850. Experian sells VantageScores, which range from 501 to 990. Consumers often get different credit report scores issued by the different credit bureaus because there is no universal standard for the formulas they use.

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