Almost everyone gets anxious when applying for an auto loan or a mortgage, but it’s even more stressful for people who get stuck paying higher interest rates or are turned down because of their credit. Most Borrowers have no idea what their credit score is or what makes up a credit score. Nor do they know that you can get a free credit report once a year from the three major credit reporting agencies.
Consumers who are denied a loan or who have to pay higher interest rates because their credit scores aren’t high enough will get to peek behind the curtain. New regulations that kick in July 21 will require lenders to share your credit score with you if that score was the basis for the decision to deny you a loan or charge you more for it.
Currently, you can get a copy of your credit report once a year from each of the three major bureaus at annualcreditreport.com, but that information doesn’t include your score. You can buy a copy of your score, but it might not have been the one the lender was using. They might have been using a score issued by a different bureau, or the score itself might have been different.
Here’s where it gets a little confusing: Lenders can ask a credit bureau to generate a score using a specific type of risk modeling, and the formulas for, say, a car loan are different from those for a mortgage, personal loan and so on. Since the calculations are slightly different, so are the final scores. Now, you’ll be able to see exactly what bank or finance department saw when they requested an inquiry into your credit score. You’ll also get information about credit scores as well as information about how to get a free copy of your credit report.