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From Banking and Finance Law Daily, February 20, 2015

Consumers win in CFPB play for credit score access

By Katalina M. Bianco, J.D.

The Consumer Financial Protection Bureau is reporting that its initiative intended to boost consumer access to credit scores has resulted in more than 50 million consumers now having free and regular access to their credit scores through their monthly credit card statements or online. The bureau launched the credit score initiative in 2014 by calling on more of the nation’s top credit card companies to make credit scores freely available to their customers. However, the CFPB admits that while consumers are accessing their credit scores and credit reports in a variety of ways, confusion remains.

“Once consumers see their credit scores, they can be motivated to learn more about their credit history, check their full credit report, and take action to improve their financial lives,” CFPB Director Richard Cordray said. He noted in prepared remarks before the Consumer Advisory Board that the influence of the credit reporting industry has expanded over time, going “well beyond credit itself.” This broadening of use makes credit reports all the more important in consumers’ lives.

We have heard consumers complain regularly about the challenges they face in getting a copy of their credit report or in getting wrong information corrected on their report. In a market like this one, where consumers cannot ‘vote with their feet’ by taking their business elsewhere, it is even more important that the Consumer Bureau is focusing its work on bringing about greater transparency and accountability,” Cordray said.

Findings. According to the bureau’s report, the CFPB conducted focus groups with consumers from diverse backgrounds across the country with the goal of better understanding consumers’ perspectives on their credit reports and scores. The bureau found that consumers:

  • access reports and scores in a variety of ways, from their credit card statements, through credit card companies, paid monitoring services, free online services, or as a result of a security breach or denial of credit;

  • remain confused about credit reports and scores in terms of how to check them, what information they include, and how to improve them; and

  • lack information on how to improve their credit histories.

The bureau also found that consumers who are more fully engaged in the financial system generally check their credit reports on a regular basis with the belief that being aware of their credit standing can help them achieve their financial goals.

Credit reporting agencies. The CFPB encourages consumers to check their credit reports regularly. To assist them, the bureau publishes and updates a list of the names and contact information for nationwide and nationwide specialty consumer reporting agencies.

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