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 NextAdvisor.com, 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.
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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