When it comes to credit-related consumer rights, the story pretty much begins and ends with the Fair Credit Reporting Act (FCRA). The FCRA was enacted in October 1970 and has been amended dozens of times since then. It contains several provisions that afford consumers certain rights regarding their credit scores, which is a numeric value used by lenders and other companies to predict the likelihood of someone missing payments.
Your credit score rights under the Act include:
- The right to obtain a credit score, with instructions on how to obtain it. You have the right to obtain a credit score from any of the three national credit reporting companies (CRCs)—Equifax, Experian and TransUnion—although there may be a cost involved with doing so. Along with each three-digit score, you have the right to know:
- the date the score was determined;
- which scoring model was used to calculate the score;
- the scoring model’s scale range (the span from its highest to lowest possible scores; and
- up to four key factors which affect your score. (These factors are also referred to as reason codes. Additional information on the factors that influence VantageScore credit scores can be found at ReasonCode.org.)
As an alternative to purchasing your score, there are numerous websites where you can obtain your VantageScore credit score at no cost.
- The right to obtain a credit score if you’ve applied for a mortgage loan. If you apply for a mortgage loan that is secured by 1 to 4 units of property, the lender is required to provide you with a score disclosure notice. That notice, which is normally delivered in writing, will include the score or scores pulled by the mortgage lender as part of their underwriting or prequalification processes. The notice must also include language explaining what credit scores are, and how lenders use them.
- The right to obtain a credit score if it’s used as a basis for a denial of credit. If you are denied credit because of your credit score, then the lender must proactively disclose that score to you, normally in writing. The lender must also provide you with the range of the model, the key factors affecting your score, where you rank relative to everyone else in the United States, and information about how you can obtain a free copy of your credit report. The score disclosure is normally delivered as part of your denial letter, which is more formally known as an adverse action notice.
- The right to know if inquiries had a materially negative impact on your scores. A credit inquiry is a record of access to your credit report or reports. Inquiries can have a negative impact on your credit scores, although they are a very minor component in the grand scheme. If your scores are being disclosed to you pursuant to any of the aforementioned scenarios and your score is lower because of inquiries, then that fact must also be disclosed to you.