The FACS Act (Fair Access to Credit Scores Act) took another step closer to becoming law Monday when the proposal was adopted by the Senate. Senator Mark Udall, a Democrat from Colorado, introduced the proposal, which would require the disclosure of a credit score along with a credit report if an adverse action was taken by a lender or insurance company. As of now the law only requires that a free credit report be provided to a consumer who has suffered an adverse lending or insurance decision.
The challenge that the law faces at this point seems to be more about the process than it does about support. It is important that consumers be given “the” score that was used by a lender rather than “a” score. In fact, the Senator’s office is concerned that the score that’s disclosed is in fact the “transactional” score rather than an “educational” score, which is less meaningful to consumers and opens up the potential for confusion.
In the mortgage industry a process already exists that requires the disclosure of the scores that were used for mortgage underwriting. In many cases the scores and the reports are given to borrowers, always proactively. This model works and seems to lay the groundwork for the FACS Act implementation.
John Ulzheimer – Credit scoring and credit reporting expert and author, John is the President of Consumer Education for Credit.com. Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on CreditBloggers.com.
John Ulzheimer Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on Credit.com News & Advice.
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