Cohen Introduces Bill to Give Consumers Free Credit Score

WASHINGTON, D.C. – Congressman Steve Cohen (TN-9) today introduced legislation he authored to provide consumers with an annual free credit score from each of the three credit bureaus.

“A good credit score means better interest rates on mortgages, bank loans and credit cards, smaller deposits for rent or utilities and even lower insurance premiums,” Congressman Cohen said. “My bill would require that a consumer’s credit score be included with their annual free credit report.”

The Wall Street Reform and Consumer Protection Act passed in the last Congress included a provision that provides consumers who have been turned down for credit, or receive a higher interest rate on a loan or unfavorable terms on a credit card, an automatic free copy of their credit score. Cohen’s bill – the Fair Access to Credit Scores Act of 2011 – would amend the Fair Credit Reporting Act to require the inclusion of credit scores with free annual credit reports provided to consumers.

The bill would also call for a Government Accountability Office (GAO) study on factors used to determine bankruptcy risk scores – the number that indicates the likelihood of an individual filing for bankruptcy. The study would provide analysis on the factors used to determine a bankruptcy risk score, how a bankruptcy risk score impacts the ability of consumers to receive loans and the actions that consumers can take to improve their bankruptcy risk score. Although it has been used for more than 20 years to assess risk in lending, few consumers know of this risk score, much less how to adjust it downward.

This legislation would help consumers know the scores used in particular transactions to help consumers better manage their finances. Consumers don’t currently have the right to know which score a lender used in making a loan or financial decision. It’s imperative that consumers have access to their credit scores used to determine their credit worthiness.

Congressman Cohen also recently re-introduced the Equal Employment for All Act. This bill would give some of our most vulnerable, “credit challenged” citizens – students, recent college graduates, low-income families, senior citizens, and minorities – the opportunity to begin rebuilding their credit history by obtaining a job. Far too often, employers turn down “credit challenged” applicants because they have linked credit scores to potential job performance.