It happens all too often that American consumers overlook their credit report or, even worse, do not bother to request a free yearly report in the first place. Only one-fifth of U.S. adults look at their credit reports every year, according to the Consumer Financial Protection Bureau, the nation’s top financial consumer protection regulator. As an unfortunate, and common, result, people may not be aware of their poor credit scores until they are applying for a credit card or a mortgage, in which case it is too late and they are penalized with hefty interest rates, fees or flat out rejection.
After considering this issue along with the high prevalence of errors in credit reports and scores, the Consumer Financial Protection Bureau (CFPB) has begun to think of ways to get Americans to take a good look at their scores on a more regular basis. This is why the CFPB recently called on banks and credit card issuers to give people free access to their credit scores, potentially as part of monthly statements or bills.
Credit reports and scores are extremely important financial documents because they can determine the terms of people’s mortgages, whether they qualify for auto loans or if they are eligible for different credit cards or lower interest rates. Few people fully understand how many everyday services take into account a person’s credit report before doing business with that person. A small, unnoticed error on a person’s report could have numerous detrimental consequences when it comes to that person’s financial present and future.
The CFPB hopes that that disclosing credit scores to consumers on a monthly basis would make them more likely to spend time examining their credit report, particularly if their scores are low. This way, consumers will be able to spot any problems or errors before it is too late and these problems end up costing them in the long run.
For more on this story, visit NBC news’ article at http://www.nbcnews.com/business/consumer/us-urges-banks-give-free-credit-scores-n41091.