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Wednesday, September 26, 2012

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 CFPB 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.
The CFPB said in a press release:
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 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.

Read the CFPB’s press release.

Read the Dodd-Frank Act-mandated study.

2 comments:

Aidan Morrissons said...

I think mortgage company massachusetts could use this same system they are using. But I hope that credit scores will be visible for lenders and at the same time for the consumers. They have the right to be knowledgeable about these factors.

Kendrick Blake said...

To be able to avoid this from happening and provide the borrowers from frauds, I think its the leads broker sole responsibility to inform and educate their clients on how does the cycle and the process of housing loans work so that they will know their rights and upto what extent are they liable.

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