2010 Law Requires Free Credit Score For Those Denied Credit

Earlier this year the Senate approved the proposal which requires the credit bureau involved in a decision to deny credit, upon request, must now provide the consumer a copy of their credit score.  The legislation was signed by President Obama.  Unfortunately, the credit bureaus not involved in the credit decision are still allowed to withhold your score from you unless you pay a fee.

The credit score, of course, is important because the credit score is what most lenders rely on when making a lending decision.  Obviously, providing the score to the consumer is important to help familiarize the consumer with the scoring system.  Simply put, there are three main components of your credit score:

1/3 of your score is determined by your payment history.  The most recent payment history is weighted the most through the past 6 months also important is payment history over the past 2 years.  Paying on time with no 30, 60, 90 or 120 day late marks is very important.

The next 1/3 of your score is based on the outstanding balances in relation to your available credit:  In other words, your utilization rate.  If you have ‘maxed' your credit lines your score will reflect this utilization.  As a general rule you want to utilize less than 30% of your available credit at the time your score is 'pulled'. The difference between a 90% utilization rate and a 30% utilization rate can be significant, And can impact the rate the lender is willing to offer, or worse, it might preclude the lender from making an offer at all.

The final 1/3 of your score is based on several factors including collection accounts,  length of credit history, activity on your open accounts, how many accounts, how many have been recently opened compared with the total number of accounts, recent inquiries, types of credit used among other factors.

Credit repair is a 3-step process.  First, is to perform a qualitative and quantitative analysis of your credit profile.  Next, is to build a road-map that starts with income that exceeds expenses, a review of your credit report through the lens of consumer protection legislation, and finally maintaining and/or establishing good payment practices moving forward.

If you have feel you have been unfairly denied credit or if you have question about your credit report, reporting,  inaccurate, unverifiable, incomplete or biased information Credit Repair Capital is your Free Credit Repair Center with daily updates about the consumer credit markets and you can get started addressing your questions with the free e-book stuffed with good information including ‘the 5 red flags to consumer credit'