At one point, it was relatively easy to keep up with one’s credit score. Today is not that day, though it’s about to change. Financial guru and Washington Post columnist Michelle Singletary recently reported that it all comes down to your consumer-purchases score versus your creditor-purchases score. Whereas many consumers were taught to order annual reports from Experian, TransUnion, and Equifax, experts now say that the scores reported by these credit reporting agencies are merely “educational” scores that may – or in some cases, may not – be used by lenders in determining creditworthiness.
The Consumer Financial Protection Bureau, the authority that reports the latest on all things credit-like, suggests that it’s no longer advisable to take “free credit scores” at face value. Credit monitoring promotions are also a bad idea. Why? Both of these methods that, seemingly, did the job of providing consumers with credit scores are now deemed unreliable – misleading even. Even the old faithful AnnualCreditReport.com is no longer a worthy candidate in the land of personal finance. At worst, both practices could lead to a waste of time and money. Misconception of a credit score could also lead consumers to settle for high interest rates on loans and credit cards.
Thanks to the Dodd-Frank financial reform act, consumers will now be privy to better details about their financial picture.
Read more at The Washington Post.