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As part of the Dodd-Frank bill we've been talking about the new consumer financial protection bureau.
Officially opens today and they're rolling out new rules intended to give consumers better insight into their own credit situation.
And that includes sending you a copy of your credit score any time you're denied credit.
But not all credit scores are alike and there are things -- need to be aware -- alzheimer's is the president of consumer education at smart credit dot com John great -- again.
Thank you for having -- -- I appreciate it well you know.
-- the credit score is the big Kahuna for consumers it is being number it's -- thing you gotta have.
Used to have to pay for it now it's free I say that's a good thing from Dodd-Frank.
It's absolutely a good thing what this is a very very complicated -- of Dodd-Frank it's gonna get a hackable work out right out of the gate.
Over half a billion that's with a B half a billion credit applications are either denied it were adversely approved -- approved below less advantageous terms.
Every single year and every single one of those it's based on a credit score from this point going forward.
Is gonna require or tracker I notice from the lender and -- at a letter to the consumer.
That tells them they can denied based on the scorned they're gonna have to include the score -- that latter.
All right so when might do that what when where people gonna say okay -- -- have that credit score.
-- you can have -- if you're denied credit based on the score if you're a prayer about what court term is.
Are based on a credit score if you haven't HP are on a credit card co -- because of your credit score or and this is important this is.
This one is kind of -- under the radar.
If your insurance premiums co op -- -- utility provider requires an -- If they're using a legitimate credit score per the definition of a fair credit reporting act then at credit scores required -- well.
-- and I want to remind people.
How these things get used determines -- they get a mortgage loans car loans to determines -- and your credit cards.
Cell phones insurance -- -- I mean any time you go out and -- everything thing.
Right -- out there of their look at your credit score right over your shoulder.
Other other than applying for a job your credit score is used almost across the board for almost every other transaction that you execute -- the -- -- Are right now here's the crazy thing that you want to talk about which I think it's critical and surprising.
You say that credit score is sold to consumers are different from the ones that companies may use house so.
Yeah and this is one of those things that people kind of in -- now in the credit world authority needed -- but the CFT he released a study earlier this week.
It how to quantify but a lot of people already knew which is that the scores that are being marketed aggressively to consumers.
On television ads on the Internet over the radio at sporting events.
They're not really the same -- that are being sold to the lenders which is problematic for a couple reasons first off.
Consumers are actually spending money on these things are not be given to them for free to -- to sign up.
For trial subscription services that are being built for them.
So they're -- RY out of their investment.
Second is is the score in some cases can be misleading the consumer to -- that there -- A poor credit risk than there really are or actually a better credit -- then they really are they walk into a lender.
I -- office with unrealistic expectations of how they're gonna get treated which is problematic because the can lead to significant embarrassment.
On the consumer spark.
This I think -- we're just not educated about -- -- is that because they're trying to mislead us.
Not I don't think there are purposely trying to mislead anybody to let me get your -- example let's say that Gerri Willis is legitimate -- score is 750.
But the score that she gets on some website somewhere -- 6988.
As 698 is very different than 750 yet -- walked into a lender you're gonna expect to be treated like a 698 which is very different -- -- you're gonna get treated.
Because of -- 750 -- cut both ways.
That's the biggest issue in some people's mind with respect to these artificial or educational credit scores that are being so aggressively marketed to consumers.
You know what LA it's eight at six my friend not 758 that college -- light on that show folks -- I'd be kind.
There -- really companies out there that do this and we all know Equifax Experian Trans Union you'll also see if any and intersections virtue and -- PO so.
At the end of the day.
This is a private sector business OK I know you think you have to rely on this like you rely on information come from the federal government but the reality is.
These are private companies selling your personal information and it may be true it may not -- Yeah I think the takeaway from invest says buyer beware -- -- everywhere it if you find tax on these web sites that say.
These are educational scores these -- may not be -- scores that lenders are actually using.
Then you have to decide whether or not -- -- cough up 1495 a month to monitor your credit report and C dot score all the time.
Conversely if you want to you there are a lot of website so watch -- give you -- -- for free they may or may not be the same ones are lenders are using.
But they're out there credit -- credit -- and -- Credit dot com does that so -- -- -- to get him for freedom we should have been given someone your credit card.
And the expectation is what I know this is our real score but I I didn't pay for a while very good advice that great to see John -- coming back -- appreciate it.
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