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CFPB Consumers may not receive true credit score
WASHINGTON (7/21/11)--A Consumer Financial Protection Bureau study has found some discrepancies between the credit scores that are provided to consumers and the scores that lenders and other businesses sometimes use to judge a consumer’s creditworthiness. The CFPB in its study noted that while many consumers may believe that the score provided to them via a free yearly credit report or a paid-for credit score service is their only credit score, a range of credit scores, from a variety of sources, are available. While some of these scores are used by both consumers and lenders, many of the scores used by lenders to determine creditworthiness are never disclosed to consumers. Potentially inaccurate credit scores could cause consumers 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. Inaccurate scores could also result in consumers that have underestimated their own creditworthiness accepting poor loan terms. 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. Consumers that are rejected for loans or other financial products will as of July 21 have free access to the credit score that was used to make the decision. (See related story: Rejected consumers now can access free credit scores) For the CFPB study, use the resource link.
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