Your credit score is a numerical calculation based on information from your credit report that supposedly determines your risk for default on loan or credit payments. All kinds of lenders and creditors use credit scores in their lending decisions. (Learn more about credit scores and credit reports.)
If you want to know what your credit score is, you can pay for it. Although whether it’s worthwhile to do so is questionable. In some situations, however, a creditor must provide you with a free credit score. This generally happens when the creditor relied upon your credit score in making a credit decision.
Here are the situations when you can get your credit score for free.
If you apply for a loan on residential property and the lender uses a credit score, it must disclose your credit score and all of the factors (up to four; five if one of the factors is the number of inquiries) that negatively affected your score.
The lender must also give you a notice with contact information for the credit reporting agency that provided the score.
Lenders that evaluate loan applications using automated systems that include information in addition to what’s in a credit file or that get a credit score from a company that is not a credit reporting agency, may provide a credit score from a credit reporting agency instead of the score they actually used.
A User of Your Credit Report Takes an Adverse Action Against You
If a creditor used your score in making a credit decision, and the decision resulted in an adverse action against you, the creditor must disclose:
An adverse action includes when a creditor:
If a creditor uses a consumer report in connection with deciding what regular annual percentage rate (APR) to charge you for new or existing credit, and then offers you a rate less favorable than the rate it offers approximately 40% of other consumers to whom it offered a similar type of credit, it must do the following:
If the credit you are requesting does not have an APR, the creditor must tell you whether the most important credit term in the contract differs for you than for others. For example, it might have to tell you that the utility service deposit it charges you is higher than what it charges others.
The creditor does not have to comply with the above notice requirements if:
There are other times when these notice rules are limited. For example:
Some states require a creditor to disclose your credit score in certain sitautions. For example, under California law, if a car dealer gets your credit score in connection with your application for a vehicle loan or lease, the dealer must give you your score, information on the range of possible scores, and contact information for the credit reporting agency that supplied the score.
Because the rules regarding when creditors must provide your credit score (and sometimes credit report) are complicated, it is often difficult to know if you are entitled to a free credit report or credit score.
The best policy is to ask for more information whenever a creditor denies credit, offers credit terms less favorable than those you requested or think you deserve, reduces your credit limit, or cancels your credit card. In these circumstances, even if the creditor (or insurer, government agency, employer, landlord, or other entity using your credit score) does not give you a notice or credit score, always ask:
The creditor or other user may not agree to provide you with this information, but it doesn’t hurt to ask. And those who use your credit score may be violating the law if they don't give you the notice or credit score when required.
This is an excerpt from Credit Repair, by Margaret Reiter and Robin Leonard (Nolo).