St Casimirs Mortgage Minute

CFPB Study: Credit Scores Used by Consumers, Lenders Can Differ



About one of five consumers buying a credit score from a credit bureau are likely to receive a meaningfully different score than the one a lender would use in making a credit decision, according to a Consumer Financial Protection Bureau study released yesterday.

The Dodd-Frank Act-mandated study analyzed credit scores from a total of 200,000 files at TransUnion, Equifax and Experian to compare scores sold to consumers with those sold to creditors.

“A meaningful difference means that the consumer would be likely to qualify for different credit offers -- either better or worse -- than they would expect to get based on the score they purchased,” the CFPB said in a press release.

The agency emphasized that there’s no way consumers can know how the score they receive will compare with the score a creditor uses in making a lending decision. They therefore can’t rely exclusively on the credit score they receive to determine how lenders will view their creditworthiness.

The CFPB recommended that borrowers shop around for credit, check the credit report for accuracy, and dispute errors. The bureau will begin supervising consumer reporting agencies on Sept. 30