FICO Announces Credit Scores Will be Available to Consumers Through Financial Counselors
Earlier this week, FICO announced that it had reached an agreement with the three main credit reporting agencies (TransUnion, Equifax, and Experian) that will allow housing and financial counselors to share with their clients their credit scores. This initiative, entitled the FICO® Score Open Access for Credit & Financial Counseling, will allow qualified and enrolled credit, housing, and financial counselors to provide their clients with their FICO scores along with other educational material about credit. FICO also announced that Experian has agreed to allow these qualified counselors to share Experian credit reports with their clients.
Currently, counseling providers are generally unable to provide their clients with the credit reports or scores bought on the client’s behalf due to contracts with the credit reporting agencies (TransUnion, Equifax, and Experian). These contracts are typically a three-way agreement between the counselor, FICO, and one of the credit reporting agencies and prohibit sharing the report or score with any other entity, which includes the client.
In its announcement, FICO credits the Consumer Financial Protection Bureau (CFPB) with bringing this issue to its attention. In a blog post on its website, CFPB argues that, because of the no-sharing policy, consumers were unable to review their credit history independently, causing them to be increasingly dependent on the counselor to improve their credit standing. Both FICO and CFPB believe that the policy change will enable roughly one million consumers who receive credit counseling annually to obtain their credit scores and other important credit information necessary to improve their financial situation.
More information about the new initiative is available here.