The CFPB released a study comparing credit scores sold to creditors and those sold to consumers. The CFPB study, required by the Dodd-Frank Act, found that about one in five consumers is likely to receive a score that is meaningfully different than the score a creditor would receive. A score is considered meaningfully different if the consumer is likely to qualify for credit offers different than those the consumer would expect to get based on the score purchased. For this subset of consumers, the study concluded that the score discrepancies could cause harm to consumers because they, not aware of the discrepancies, may waste time and money shopping for loans for which they are not qualified. The study recommends that consumers avoid relying on scores they purchase as the sole basis for assessing their creditworthiness, shop around for credit options before making a decision, and check their credit report for accuracy and dispute errors. Additionally, the study suggests that providers of scores should ensure that the potential for score differences is clear to consumers.
Alert October 02, 2012