Individuals that are denied bank loans or whose credit line and interest rates have been adjusted will now have access to detailed explanations as to why from their lenders, the Daily Finance reports.
The Dodd-Frank Financial Reform Act, which was instituted by the Federal Trade Commission and Federal Reserve Board, attempts to restore the financial crisis by protecting consumers, creating jobs and putting an end to bailouts, according to the United States Committee on Banking, Housing & Urban Affairs. The act specifically outlines that all information regarding mortgages and credit cards is readily available to the consumer, and contracts are absent of hidden fees and illegitimate terms. NextAdvisor.com president and founder Erik Larson mentioned the potential consequences of consumers checking their score. "It may create more confusion than before because it will be difficult to put [the score] in context," he says. "It's a moving target. If it's not good, you have time to improve it. Once you apply, it's too late and even applying can lower it. This way, you can apply with confidence." Consumers are advised to make a thorough check of their credit score before applying for a loan.