The first section of the bill states that the official name of this legislation is the "Free Credit Scores for Consumers Act of 2024."

Congress has found that consumers face confusion and lack of transparency regarding credit scores. Reports show that consumers often purchase credit scores from credit reporting agencies without understanding that these scores may differ from those used by lenders, leading to misunderstandings about creditworthiness and financial decisions. Recommendations highlight the need for clearer communication and educational tools to help consumers understand and improve their credit scores.

The document amends the Fair Credit Reporting Act to define terms related to credit scores, including definitions for "credit score," "educational credit score," "key factors" affecting these scores, and "credit scoring model." It also makes additional amendments to align the existing text of the Act with these new definitions.

This section of the bill updates the Fair Credit Reporting Act to require credit reporting agencies to provide consumers with detailed information about their credit scores, including the scores themselves, factors affecting the scores, and actions to improve them. It also mandates that credit scores be maintained for two years, only disclosed to the consumer, and removed after this period.

The section mandates that consumer reporting agencies must clearly explain the differences between credit scores and educational credit scores, and display disclaimers about these differences on their websites and in any related materials. It also prohibits companies from misleadingly referring to educational credit scores as credit scores, and allows for modifications of these disclaimers by the Bureau if necessary.

Consumers have access to multiple credit scores because different lenders and creditors use various scoring models to make lending decisions. Educational credit scores, which might not be used by lenders, are intended to help consumers understand how their report information might affect loan terms.

The educational credit score is a tool meant to help consumers understand how credit report information might affect their credit terms. However, it may not be the same as the score lenders use for credit decisions, as different companies use various formulas and data.

The text describes changes to the Fair Credit Reporting Act to make it easier for consumers to receive free credit reports and scores. It mandates that credit agencies provide free credit scores with annual reports, highlights situations where additional free reports are available, and requires online and phone access to these services.

Consumers have the right to get a free copy of their credit report and score each year from major credit agencies. They can also get additional free copies in specific situations, like when they are unemployed and looking for a job, receiving public assistance, suspect their report has errors or signs of fraud, or if they are involved in a dispute about their credit report's accuracy.

Consumers have the right to access a free copy of their consumer report and credit score from each national consumer reporting agency once a year. They can also get additional free copies under certain conditions, such as if they are unemployed, receive public assistance, suspect fraud, or face issues with their report's accuracy.

Private educational lenders must give consumers free copies of any credit reports and scores they use for loan decisions within three business days and before the consumer signs the loan, and they cannot charge consumers for these reports.

Motor vehicle and indirect auto lenders must provide consumers with free copies of the consumer reports and credit scores they used to decide on a loan or lease before the consumer signs any agreements. Additionally, lenders cannot charge the consumer for the cost of obtaining this information.

Residential mortgage lenders are required to give consumers free copies of the credit reports and scores used in deciding whether to offer a loan, within three business days of using them. Lenders cannot charge consumers for obtaining these reports or scores, and they are not obliged to share any credit score information gathered after the loan has been finalized.

The section requires the Bureau of Consumer Financial Protection to issue final rules within two years from the date the Act is enacted. These rules are meant to implement the changes introduced by the Act.