Credit scoreHave you ever been turned down for a loan? Had your credit line slashed or interest rate bumped up? Well, starting Thursday, banks and other lenders will be required tell you a bit more about why. Thanks to the Dodd-Frank Financial Reform Act, the Federal Trade Commission and Federal Reserve Board are implementing a new rule requiring lenders to show consumers the credit score data they used to make their decision.

In addition to the score, creditors must also give the score range, the date score was generated, up to four contributing factors that affected score, and which agency issued it. The new Consumer Financial Protection Bureau, which opens for business on July 21, is responsible for enforcing the rule.

For consumers, this is good news, as it adds a new level of transparency to the credit process. But when it comes to getting a credit score, it's a little like getting your test result without seeing the grading curve, says Erik Larson, president and founder of, a consumer information resource for online services. "It may create more confusion than before because it will be difficult to put [the score] in context," he says.

Credit scores are calculated using a complex construction of formulas and factors, based on the information in a consumer's credit report, as well as additional information. Some lending companies use proprietary scores, based on in-house formulas, while others use brand-name scores, like FICO or VantageScore, which they buy from the major credit reporting agencies: TransUnion, Equifax and Experian. Both FICO and VantageScore have their own scale and formulas for creating a score. For example, a 660 FICO score, based on its 300 to 850 scale, is relatively higher than a 660 Vantage score, which is based on a scale of 501 to 990.

Variables such as the number of recent credit inquiries, late payments, liens, and so forth can impact a credit report and score on fluid basis. As those factors shift month to month, so can an individual's score. "It's a moving target," says Larson, who advises consumers to check their credit score before applying for a loan. "If it's not good, you have time to improve it. Once you apply, it's too late and even applying can lower it. This way, you can apply with confidence."

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A loan is a financial transaction in which one party - the lender - agrees to give another party - the borrower a specific amount of money which must be paid back in full.

July 17 2013 at 1:33 PM Report abuse rate up rate down Reply

Does anyone find it strange, or at the very least a conflict of interest, that the National Foundation for Credit Counseling is funded mostly by fair share donations from sub-prime credit card companies?? These donations are tax deductible, and are based more on the amount of money the NFCC returns to these creditors through 501c3 non profits, like Money Management International, with debt consolidation programs, rather than financial literacy merit.

August 17 2011 at 10:56 AM Report abuse rate up rate down Reply

Dem logic; Borrow your way to the American Dream.

July 22 2011 at 8:30 AM Report abuse -2 rate up rate down Reply

Dodd and Barney are at it again! These two idiots are the ones that caused the housing problem and now they're at it again. Credit cards to everyone including their pets is one of the reasons we're in this mess. Way to go Dodd and Barney. You guys are as stupid as Obama!!

July 22 2011 at 8:12 AM Report abuse -2 rate up rate down Reply

Well, supposedly I am "dead" - at least that is what Hyundai Credit told me. Don't show up as dead on any of the major reporting agencies though...Credit score is 650 but neither my husband nor I can get a loan for squat. They say that my husband doesn't have ENOUGH credit...It's just ridiculous. No one is loaning ANYTHING.

July 21 2011 at 7:35 PM Report abuse +3 rate up rate down Reply

What's really criminal is that they allow employers to use this flawed credit score system in their hiring decisions. Talk about really being screwed. Imagine being denied employment because of your credit score when you're trying to get back on your feet financially.

July 21 2011 at 6:45 PM Report abuse +4 rate up rate down Reply
2 replies to Grassdog4's comment

Its happened to me about 8 yrs ago. I applied for a job at a bank as a teller and after wasting my time on an interview I was denied the job because of my credit. Even though i explained to the jerk that it was because i was just recently divorced and my ex ruined my credit.

July 21 2011 at 7:33 PM Report abuse +2 rate up rate down Reply

Not only that, your credit score affects car and home insurance, for starters. After we (The American People) bailed out all these banks, now no-one can get a loan for anything. It all doesn't make sense to me.

July 22 2011 at 3:44 AM Report abuse +3 rate up rate down Reply

Let's see...before I short sold my house my fico score was 780. Then to qualify for a short sale I was told that I had to default on my loan for at least 3 months in order to get anyone to talk to me and consider this type of sale. A fico score is nothing more than a debt score I believe...the more you're in debt the better the score therefore those that brag about paying cash for everything are paddling up a stream without a paddle with this system in place. Frankly, the whole credit reporting system is flawed by the big 3 reporting agencies who can put anything on your report as reported by a business but to straighten it out and correct it, is another uphill battle that will just piss you off before it's over. You'll only get a loan when you don't f'n need it!

July 21 2011 at 4:29 PM Report abuse +4 rate up rate down Reply

Perhaps it is time for Americans to save their money, get a roomate, and buy the item or object outright. Credit is the result of being unable to put off instant gratification.

July 21 2011 at 3:14 PM Report abuse +4 rate up rate down Reply
1 reply to esaustew's comment

Just how do you explain to people that are ready and trying to purchase their first home, "Oh, if you want a home, you'll have to work for 30+ years, save all your extra money (what extra money?), then you can MAYBE have one". Not only is it sometimes NOT about's about simple needs. A home, a car, a loan to pay off hospital bills that were unexpected, funeral expenses, college tuition, etc, etc, etc. You are living in the twilightll zone. Sure you'll find the perfect roomate there.

July 22 2011 at 3:40 AM Report abuse -3 rate up rate down Reply
1 reply to Valentino1926's comment

You explain it like this..."If you can't afford it, you can't afford it. If you can't qualify for the loan, you can't afford it." See how easy?

July 22 2011 at 8:32 AM Report abuse rate up rate down

"Variables such as the number of recent credit inquiries, late payments, liens, and so forth can impact a credit report and score on fluid basis."

This is the problem I have with the way credit scores work. I was stupid with my money and was at 600 for a credit score. Now after hard work getting my credit score up tp 780, companies still want to hold me accountable for past mistakes that have already been taken care of by trying to give me a high interest rate. What is the point of credit score if some companies are going to ignore it and go by ANYTHING in the past just to scam you? Not all companies do this of course but a lot of them do. I have had some go just by the credit score.

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July 21 2011 at 1:51 PM Report abuse +1 rate up rate down Reply
2 replies to Gabriel's comment

I think the system is a disgrace,how can you prevent some on for making a hard inqury.I had five last mth that i knew nothing about.I subscribe to creditkarma ,it gives me an estimate of my score and shows me all hard inquries.

July 21 2011 at 2:33 PM Report abuse -1 rate up rate down Reply

A company has a right to take your repayment history into account before lending you money. If you were the lender, you would certainly see it that way.

July 22 2011 at 8:33 AM Report abuse rate up rate down Reply

Denied credit?

July 21 2011 at 12:44 PM Report abuse rate up rate down Reply