House Committee Considers Changes to Credit Reports
On Thursday, July 11, the House Financial Services Committee will consider several legislative bills that would modify certain aspects of credit reports, including the proper use of alternative data and the length of time adverse information may remain on a credit report.
Several of those bills are listed below:
- The “Free Credit Scores for Consumers Act of 2019” would require credit reporting agencies (CRAs) to include credit scores when providing consumers their free annual consumer report. The bill would also require CRAs to provide information to consumers on how their individual credit scores were calculated.
- The “Restoring Unfairly Impaired Credit and Protecting Consumers Act” would shorten the length of time that adverse information remains on a consumer report from seven to four years and bankruptcy information from ten to seven years.
- The “Improving Credit Reporting for All Consumers Act” would provide consumers the ability to appeal potentially erroneous information in their credit files. The bill would also require CRAs to provide more information about credit scoring products and credit monitoring services.
- The ““Clarity in Credit Score Formation Act of 2019” would direct the Consumer Financial Protection Bureau (CFPB) to validate the use of alternative data in credit scores and provide the CFPB the authority to prohibit certain data points from being used for credit scores.
The Committee is expected to pass several of these bills, most of which are Democratic bills lacking Republican support. Although the full House may eventually pass this legislation, it will need Republican support to make it through the Senate.