The Federal Reserve and Federal Trade Commission have issued new rules designed to help inform consumers about the impact of their credit histories on the interest rates they are offered when seeking loans. The rules will require lenders to notify consumers who are offered higher interest rates due to their poor credit histories. Consumers who have been offered terms that are "materially less favorable" than those offered to other applicants will be notified after the terms have been set, but before they are required to commit to the agreement. Impacted consumers will also be entitled to a free credit report. Lenders will also have the option to offer borrowers a free credit score instead of providing the notification. The new rules will go into effect on January 1, 2011.
Many consumers are unaware of the importance of their credit histories, so this policy should be helpful in educating those whose credit scores are hurting them financially. But it's better to know where you stand before applying for a loan in the first place. To learn more, check out our reviews and comparison of credit report monitoring services.
