Congressman Cohen Introduces Bill to Give Consumers Free Credit Scores

[WASHINGTON, DC] – Congressman Steve Cohen (TN-09) today reintroduced The Fair Access to Credit Scores Act of 2016, which would include a reliable, accurate credit score with the free annual credit reports available to consumers by the Fair Credit Reporting Act. April is National Financial Literacy Month.

“A good credit score means better interest rates on mortgages, bank loans and credit cards, smaller deposits for rent or utilities and even lower insurance premiums,” said Congressman Cohen. “Unfortunately, many Americans may find monitoring their credit scores to be difficult and expensive because gaining access to reliable and affordable information about their credit scores is not nearly as easy as it should be. The Fair Access to Credit Scores Act would require that a consumer’s credit score be included with their annual free credit report.”

Recently, John Oliver, host of HBO’s Last Week Tonight, highlighted the credit reporting industry and questioned how credit scores play such a pivotal and sometimes damaging role in our life with reporting errors.

While Fair Isaac (FICO) credit scores from Equifax currently cost individuals $15.95, consumers may be tricked into buying inaccurate credit scores from competing credit agencies and/or lured by the false promise of a “free” credit score into signing up for credit monitoring services costing up to $200 per year.

The Wall Street Reform and Consumer Protection Act passed in 2010 included a provision that provides consumers who have been turned down for credit, or who received a higher interest rate on a loan or unfavorable terms on a credit card, an automatic free copy of their credit score. This bill would expand upon that provision to provide all consumers with an annual credit score to complement their free annual credit report.

Also, this measure would ensure that the free annual credit score received by consumers is a reliable score actually used by lenders, rather than an “informational score” of unknown reliability. It would give consumers access to all scores generated in the previous year and stored in their credit files – information that lenders have accessed about the consumer’s individual creditworthiness – instead of consumers seeing only those scores that resulted in “adverse actions,” as provided by current law.

The legislation would strengthen prohibitions against deceptive marketing of free or low-cost credit reports and credit scores. It would also standardize credit report disclosure formats for easy comparison when consumers order their free annual credit reports.

The bill is cosponsored by Reps. John Conyers (MI-13), Raúl Grijalva (AZ-03), Nikki Tsongas (MA-03), Eleanor Holmes Norton (DC-At Large) and Pete Visclosky (IN-01).