(Bloomberg News) U.S. consumers denied a credit card or auto loan will be entitled to free copies of their credit scores starting today.

The Dodd-Frank financial overhaul law passed last year expands credit-score disclosure rules and places the responsibility on financial companies to provide the numbers. It also forces lenders to give free scores to consumers who don't get the best rates when borrowing, a practice known as risk- based lending.

"The purpose for the law was to provide consumers with greater access to and information about their credit scores," Senator Mark Udall, the Colorado Democrat who proposed the provision, said in an e-mail. "By seeing the clearest picture possible of their personal finances, consumers can actively work to improve their scores," Udall said in a statement earlier this month posted on his website.

The rule applies to financial-services companies that use scores to make loans. The most common scores are based on models established by Minneapolis-based FICO, formerly known as Fair Isaac Corp., which are used to gauge a consumer's financial health. The numbers, which range from 300 to 850, affect the ability to get mortgages, credit cards and insurance products, as well as the rates borrowers pay for them. Under current laws, all consumers are entitled to free annual credit reports, not their actual scores.

CFPB Report

"The law will affect credit-related transactions that occur tens of thousands of times every day," said John Ulzheimer, president of consumer education at Costa Mesa, California-based SmartCredit.com, which offers consumers credit scores, monitoring and identity protection. It's "something consumers have wanted and have not had the ability to execute for near 50 years now since credit scoring has been used."

The rule also requires that a credit score be accompanied by the four main reasons why the number wasn't higher, such as delinquent accounts, Ulzheimer said.

The Consumer Financial Protection Bureau, which begins formal operations today, is responsible for ensuring that lenders comply and give consumers who are denied credit or don't get the best rates free scores. President Barack Obama nominated Richard Cordray earlier this week to head the bureau, which was created by the Dodd-Frank legislation. Jen Howard, a spokeswoman for the CFPB, declined to comment on the credit disclosure law and how it will be implemented and enforced.

Consumer Awareness

Consumers may be unaware of the variety of credit scores available and may purchase a score thinking it's their only "true" score, according to a report released July 19 by the CFPB. This could negatively impact them "if the credit scores the consumer buys give a substantially different impression of his or her credit risk than credit scores that a lender would use," the report said. For example, VantageScore developed by VantageScore Solutions LLC in Stamford, Connecticut, and also used by lenders, has a 501 to 990 range for measuring credit risk.