The Federal Reserve has recently published an online resource aimed to answer common consumer questions about credit scores, credit ratings and credit reports.
The guide explains in simple terms what a credit score is, what purpose it serves in the lending market and how consumers can make financial decisions to influence their credit score. It also clarifies how to address the common problem of finding a mistake on one’s credit report, and provides answers about how to request to get the mistake corrected.
According to the Wall Street Journal, the online guide is part of a multi-pronged approach by the Fed to increase consumer credit awareness. Recent regulation reportedly required lenders to report when negative information on a credit report was generating unfavorable pricing terms for the consumer, ideally leading the consumer to work to change the negative information.
Individuals with bad credit histories may benefit from perusing the Fed’s online guide to obtain information about how to improve their credit scores. The lending market is not out of the reach of a consumer with a bad credit score, however, since such a consumer can often qualify for a bad credit loan.