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Creditors Must Disclose |Risk-Based Pricing

WASHINGTON (CN) - If a creditor plans to offer loan terms that are less favorable for one consumer than they would be for many others, the creditor must inform the consumer that a credit report is being used.

The notification allows the consumer to correct any errors on the report, which may improve the interest rate, according to rules issued by the Federal Trade Commission and the Federal Reserve Board of Governors.

The rule goes into effect Jan. 1, 2011.

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