CFPB Study Finds Credit Score Discrepancies
WASHINGTON-The Consumer Financial Protection Bureau officially opened for business last Thursday without the benefit of a director-appointed by the president and approved by the Senate - but it has already released a report on the discrepancies between the credit scores sold to consumers and the scores that are actually being used by lenders to make credit decisions.
"The consumer bureau's mission is to bring transparency to the consumer financial markets so families can compare products and choose the ones that are right for them," said Elizabeth Warren, special advisor to the Secretary of the Treasury on the CFPB. "One way consumers have tried to empower themselves is by knowing their credit scores. We are assessing whether purchasing a credit score provides a consumer with the information he or she needs."
The difference in scores could lead consumers to accept poor loan terms when they qualify for better terms or to apply for loans they are not qualified for-which could result in the payment of pointless application fees and a lowering of their credit score, the study noted.
The agency is planning to "quantify the differences between the credit scores available to consumers and those used by creditors" in a follow up study. That pending study will also provide more details on how discrepancies in credit scores can harm consumers.