Free credit scores for all? Not so fast

Such a situation is called adverse approval, and it’s one of those delightfully oxymoronic terms that litter the financial-services industry. What it means is that you got the loan or credit card, but others got better rates, more favorable terms or both.

In the past, you might never have known you got less than the ideal deal, but as of Jan. 1, lenders are supposed to do one of two things to notify you. They can either:

• Send you a “risk-based pricing notice,” which informs you that your credit history was used to determine your less-than-favorable rate and terms. You’ll be told where you can get a free copy of your credit report — a copy that doesn’t count against your once-a-year freebies from AnnualCreditReport.com, Ulzheimer said.
• Send you a “credit-score disclosure notice” that includes the actual score used to make the lending decision, the date the score was created and which credit bureau’s report was used. You’ll also be told how you compare with others on the credit-score scale.

This new requirement was added to the Fair and Accurate Credit Transactions Act, a fair-credit-reporting law first passed in 2003.

Nobody has done a comprehensive survey, but many lenders seem to be opting for the more general “risk-based” notice, rather than coughing up the scores. Herb Weisbaum, an MSNBC columnist and Seattle consumer reporter, said only two of the six big credit-card companies he surveyed were sending out scores.