Lenders Must Reveal Reasons for Rejection
NEW YORK (LowCards.com) — Starting tomorrow, consumers will get an explanation when they don’t get the best interest rate or are turned down on a student loan, automobile loan or credit card application.
This regulation from the Federal Reserve and Federal Trade Commission requires lenders to send you a free copy of the credit score used to arrive at a decision. The new Consumer Financial Protection Bureau will enforce the rules. The new Consumer Financial Protection Bureau, which may be led by nominee Richard Cordray, will enforce rules saying consumers are owed an explanation when a loan is rejected. For the first time, consumers will get a clear understanding of how they are judged by lenders. The lender’s disclosure notice must provide the score and the factors that pulled down your score and where your score ranks nationally. It must give the major factors that decreased your score, such as late payments or maxing out credit cards. It will also tell how to get a copy of your credit report.
There are exceptions: The ruling applies only to lenders. If a utility, telephone company or insurance agency has a special scoring system, it does not have to provide a free credit score.