Credit Counseling Services non ProfitNon-profit credit advisory services
Million of users will now have access to credit ratings and reporting by nonprofit consultants | News
Million of users will now be able to obtain the creditworthiness and credit statements that non-profit credit advisors buy on their behalf. What's more, they will be able to obtain the creditworthiness and credit reporting that non-profit credit advisors buy on their name. Non-profit organisations providing credit advice, home advisory and other pecuniary advisory services buy credit statements and ratings for the consumer they are serving. This reporting and results help the consultants to have meaningful discussions with their customers about the actions they can take to help them better their finances.
Previously, consultancy firms were generally forbidden by their agreements with credit bureaus from giving the credit reports or ratings they bought on consumers' account. A non-profit organisation, for example, that buys a credit reference with a FICO credit point system usually has a tripartite arrangement with one of the three major credit bureaus (TransUnion, Equifax or Experian) and FICO, in which it agrees not to disclose the credit reference or rating to a company, consumers included.
The no-share directive is standard in agreements that have been subscribed by corporate customers on credit reporting and scoring. However, when applicable to credit advice, it restricts a customer's capacity to verify the credit record provided by the adviser and may make the customer more reliant on the adviser to take action to administer or enhance his creditworthiness.
There have been complaints about this from consultants and users across the state. The FICO has entered into new arrangements with the three credit bureaus, which will enable million of users receiving non-profit credit advice, home advisory and other services to obtain a copy of the FICO scores these companies have acquired.
The FICO has taken the extra steps to produce contents that help these users better grasp the keys that affect their creditworthiness. This effort builds on our Open Credit score initiatives, which help enhance consumer credit literacy and credit reporting and enable consumer to better their finances.
We started this campaign last year by encouraging more of the nation's best credit cards to make credit available to their clients. Today, more than a dozen large credit cards providers offer credit directly and free to individuals and are becoming supported by other kinds of credit providers.
Part of this on-going commitment has been to bring the consultants' concern about the limitations on their clients' credit information exposure to credit bureaus and FICO and to urge them to remove those limitations. But even with the political shift in FICO creditworthiness, stand-alone agreements between credit bureaus and advisory institutions still prevent businesses from communicating credit statements to their customers.
These limitations make it more difficult for consultants to do their work. It also prevents the customers who use it from fully benefitting from the credit information for which the advisory services organisations have been paying. As part of this continued drive to advance these topics, we are encouraging Experian to update its guideline and non-profit advisors who buy credit statements on our clients' account, who will soon be able to communicate these statements and the results to the customer.
Other credit bureaus are requested to take measures to provide this credit information as well. Terminating the limitations on credit rating and report pooling by credit advisory organisations will enable customers to take more responsibility for the management of their loans and help advisers to do their job more efficiently.