For Mark Roberts’ Use: Did you know that until recently, you had to pay to see your credit score? Luckily, as of February, the Consumer Financial Protection Bureau released a new initiative allowing more than 50 million Americans to access their credit scores for free. That access will soon expand to millions more Americans.
The three major credit-reporting agencies also agreed to changes that will make it easier to correct errors and reduce the negative credit impact for late payment of medical bills. This is good news for consumers, since just one error on your credit report can have a devastating impact on your overall score.
How to check your score. The next time you receive your monthly credit-card statement, look for your score. You can also see your score via your online account with your credit card company. If you don’t see your score, ask when it will be provided. Credit card companies are busily phasing in the changes now.
The most common credit score, and the one typically shared by credit-card companies, is your FICO® score — a three-digit number ranging from 300 to 850. You may also see your Vantage score. Scores might differ among reporting agencies, but knowing at least one version of your score should provide a good clue regarding how a lender might perceive your credit risk.
What is considered a good score? The CFPB published a report in 2013 that classified FICO scores in four categories:
- superprime (720 or higher)
- prime (660 to 719)
- core subprime (620 to 659)
- deep subprime (under 620)
New Consumer Protections. Since 2005, the Fair Credit Reporting Act ensured you the right to receive one free copy of your credit reports from each of the three major agencies, every year. Under the new agreement, if you dispute your reports you can receive a second free copy from each agency. Agencies must have trained personnel examine documentation from both you and your lender, and make a decision based on the evidence. In the past, the agencies examined documents from the consumer but generally accepted a lender’s assertion regarding a disputed issue.
Medical debt. About 43 million Americans have past-due medical debt on their reports, often due to difficulties with insurance companies or the strain of paying a large lump sum. Credit-reporting firms now have to wait 180 days before adding medical debt to a credit report. In addition, they must remove medical debt from reports when the debt has been paid by an insurance company.
Other delinquencies may remain on a report for up to seven years, even after the debt has been paid.
Investigating Your Score. If your score is lower than you expect, first obtain your credit report from each agency.You can order a free annual credit report from each of the three major credit-reporting agencies by calling (877) 322-8228. If you find inaccurate information on your report, contact the agency in writing, provide copies of any corroborating documents, and ask for an investigation.