Consumers Should Get Free Credit Scores, Watchdog Says
WASHINGTON -- The top U.S. consumer watchdog said Thursday he has called and written the heads of big credit card companies to press them to offer free credit scores to customers.
Richard Cordray, director of the U.S. Consumer Financial Protection Bureau, said consumers who monitor their credit will be less likely to default. But borrowers have told the bureau they don't always know how to obtain their score or report errors.
Some card companies such as Discover Financial Service (DFS) have already said they would provide credit scores on customers' monthly statements.
"I recently sent letters and followed up with phone calls to the CEOs of the nation's top credit card companies strongly encouraging them to consider making credit scores and educational content freely available to their customers on a regular basis," Cordray said in a statement.
Richard Hunt, head of the Consumer Bankers Association, %VIRTUAL-article-sponsoredlinks%a trade group for retail banks, said banks support efforts to better educate consumers but that providing credit scores might not be the best way to do it.
"There are numerous factors considered in weighing a consumer's credit portfolio -- not just a credit score," Hunt said in a statement Thursday.
The consumer bureau, which was created by the 2010 Dodd-Frank law, has long had concerns about consumers' access to accurate credit information. The CFPB began supervising credit reporting agencies such as Equifax (EFX) and Experian in 2012.
The major nationwide credit-reporting companies are already required to provide consumers with a free copy of their credit report every year if they request it.
But borrowers often complain about errors on their credit reports, the CFPB said. When they file disputes about the errors with credit reporting agencies, the mistakes aren't always fixed, the bureau said.
In some cases, those complaints are passed along to companies that collect and submit borrowers' data to reporting agencies. The bureau found that those data providers don't always notify the reporting agencies when they find errors but instead delete the incorrect information.
That can lead credit reporting agencies to issue incorrect scores, the bureau said. It warned on Thursday that data providers must fully investigate customer disputes.