Following suggestions from the Consumer Financial Protection Bureau (CFPB), millions of consumers will now have access to the FICO Scores and credit reports that nonprofit credit counselors purchase on their behalf, FICO (NYSE: FICO) announced Tuesday.
The software company’s newly expanded FICO Score Open Access for Credit & Financial Counseling program will allow millions of people who receive nonprofit credit counseling, housing counseling and other services to receive a free copy of the FICO Score that these organizations have purchased.
In addition, FICO has created content to help these consumers understand the key factors that influence their credit scores.
At the same time, Experian, one of FICO’s credit bureau partners, has agreed to allow qualified credit counselors to share Experian credit reports with their clients, providing additional information to consumers who are struggling financially.
Until now, counseling organizations have generally been prohibited by their contracts with the credit reporting agencies from giving the consumer the credit report or score that they have purchased on that consumer’s behalf, the CFPB noted in a statement about FICO’s announcement.
These reports and scores, however, “help counselors engage in constructive conversations with their clients about steps the clients can take to improve their financial situation,” the agency said.
As part of its ongoing efforts, the CFPB brought counseling organizations’ concerns about restrictions on their clients’ access to credit information to the attention of the credit reporting companies and FICO, and urged that these restrictions be removed.
“The [CFPB] first drew our attention to financial counselors’ need to share credit scores with consumers in early 2014 as part of the CFPB’s efforts to empower consumers,” said Jim Wehmann, FICO’s executive vice president for Scores. “Because of FICO’s longstanding commitment to consumer financial education, when the CFPB approached us about enabling credit and financial counselors to share FICO Scores they purchase with their clients, we recognized the importance of working with our data partners to make it happen.”
Written by Emily Study