As part of the huge Wall Street reform bill, yesterday the Senate passed an amendment that would give Americans having trouble securing credit or a job free credit scores. These scores are used as a rating system for all kinds of important financial decisions such as qualifying for a home mortgage or a small business loan. As this CNN Money article explains, the measure would expand an existing law that gave consumers the right to one free credit report every year from each of the top three consumer reporting agencies -- Equifax, Experian, and TransUnion.
The credit score, however, has not been made available for free. It is a numerical representation of the information in a consumer's credit report, which covers a consumer's entire credit history -- all debts, payment habits, and jobs held. The credit score is widely used as a shortcut by lenders, so monitoring it is crucial.
But options for getting a credit score have been limited to many "for-fee" sites. Some have lured consumers in by offering a "free" score in return for signing up to a credit monitoring service that could cost $14.95 a month or more, if consumers don't opt out before the end of the trial period.
The amendment "dramatically increases the number of people getting this critical piece of information," said Jennifer Talhelm, a spokeswoman for Sen. Mark Udall, D-Colo., who is sponsoring the effort.