An investigation by the Consumer Financial Protection Bureau announced today revealed discrepancies in the credit reporting market that can cause meaningful differences between lender and consumer, the agency found.
In fact, one out of five consumers is likely to receive a meaningfully different score than his or her creditor, the study finds.
“This study highlights the complexities consumers face in the credit scoring market,” said CFPB Director Richard Cordray. “When consumers buy a credit score, they should be aware that a lender may be using a very different score in making a credit decision.”
The study was conducted under a Dodd-Frank mandate that directed the agency to compare credit scores sold to creditors and those sold to consumers by nationwide credit bureaus including Equifax, Experian and TransUnion. It is a follow up to a previous study describing the credit scoring industry, types of scores and potential problems for consumers presented by discrepancies between the scores lenders use versus those consumers can access.
Among the conclusions drawn by the CFPB based on its findings: Score discrepancies may generate consumer harm, the meaningful differences mean consumers may or may not qualify for certain offers depending on how great the discrepancy, and consumers are unlikely to know about these differences.
The agency recommends consumers dispute errors and shop around as precautions based on the findings.
Written by Elizabeth Ecker
