New rules from the government could spur some people to get debt help in order to improve their credit score.
The Federal Trade Commission and the Federal Reserve Board recently announced the final rules that affect the practice of lenders using a credit report when deciding to give a person a loan. The regulations would require lenders to inform consumers if something on their report caused them to get a less-than-favorable offer for their loan.
The practice is called risk-based pricing and is used to by lenders in order to reduce their vulnerability in an already difficult credit market.
“Risk-based pricing refers to the practice of setting or adjusting the price and other terms of credit provided to a particular consumer based on the consumer’s creditworthiness,” a report from the Fed said.
Consumers can get a free copy of their credit report, which they can use to see if there are any errors that could cause them to get worse offers for loans. The rules from the government will take effect January 1, 2011.
Until then, consumers may wonder what they can do to improve their credit score. One thing they may consider is consulting with a credit counseling service, which may be able to give them advice on improving their financial situation.