U.S. Senator Frank R. Lautenberg (D-NJ) joined Senator Bernie Sanders (I-VT) in introducing legislation to protect consumers by giving them access to the same credit scores that banks and businesses look at when evaluating consumers' creditworthiness. Credit scores determine who gets loans and how much interest they have to pay, and can affect whether consumers can obtain certain credit cards, insurance, cell phones, and other services. A Federal Trade Commission study released last month found that five percent of consumers surveyed spotted errors in their reports that could lead to higher cost mortgages or car loans.
"For families across the country, credit scores influence how long they struggle under the burden of debt, and can mean the difference between being able to afford a home or car and having to do without," said Sen. Lautenberg. "I have long supported giving consumers free annual access to their credit scores, because it should be easy for all consumers to know the scores that can so substantially affect their financial well-being."
"A credit score affects consumers' ability to finance important purchases like homes and cars, but many Americans may not be fully aware of the significance of their credit score or know what they can do to correct serious errors," said Sen. Sanders. "The bottom line is that everyone applying for a loan should be able to see the same information that banks rely on to judge whether a consumer is creditworthy."
In addition to requiring once-a-year free access to credit scores, the "Fair Access to Credit Scores Act of 2013" would help ensure that credit scores are accurate and crack down on deceptive marketing practices that lure consumers into buying unreliable or unnecessary credit monitoring services.
Consumers who are turned down for credit or who were charged higher interest because of an unfavorable report are entitled to a free copy of their credit score under a provision in the 2010 Wall Street Reform and Consumer Protection Act, of which Senator Lautenberg was an original cosponsor. This bill would expand access by providing all consumers with their credit scores at no charge once a year. The legislation also would strengthen consumers' rights to sue credit reporting agencies over inaccurate information.
Monitoring credit scores can be difficult and expensive. One credit agency, for example, charges individuals $15.95 to see their report. Some consumers say they have been tricked into buying inaccurate credit scores from competing credit agencies and there have been complaints about misleading promises of "free" credit score that end up costing consumers up to $200 per year.
The Federal Trade Commission study released last month found errors in one out of four credit reports by Equifax, Experian and TransUnion, the three major agencies in the United States.
The Senate version of the Fair Access to Credit Scores Act is also co-sponsored by Sens. Dianne Feinstein (D-CA), Barbara Boxer (D-CA), and Robert Menendez (D-NJ). Companion legislation introduced in the House by Rep. Steve Cohen (D-TN) is cosponsored by Reps. Eleanor Holmes Norton (D-D.C.), Albio Sires (D-NJ), Marcy Kaptur (D-OH), John Conyers (D-MI), Raul Grijalva (D-AZ) and William Lacy Clay (D-MO).
The bill also has support from Consumers Union, U.S. PIRG, the National Consumers Law Center, and National Association of Consumer Advocates on behalf of its low-income clients.