CFPB Warns: Your Lender May See a Different Credit Score Than You Do

NEW YORK (MainStreet) – You’d think the credit score you get is the same one a creditor gets.

You know, the company that makes an up-or-down decision on whether you get that new home, car or loan to open a small business.

Inconsequential stuff like that.

But if you thought so, you’re probably wrong – or so says the nation’s consumer advocacy agency.

One in five consumers get a different credit score than the one that goes to creditors, the Consumer Financial Protection Bureau says. The CFPB think that’s a big deal, since a lender could see a “meaningfully different score.”

“This study highlights the complexities consumers face in the credit scoring market,” CFPB Director Richard Cordray says. “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 CFPB is mandated to study and recommend any needed changes in the relationship between consumers and credit score agencies, and the study is the first major step in that direction for the agency – a thorough one that included analyzing 200,000 consumer credit files.

Conclusions from the report are not generally helpful to consumers who need to get credit:

Different scores can lead to “consumer harm.” With lousy credit score data, consumers may apply for credit “they are not qualified for” or could “accept offers that are worse than they could get” and end up paying higher interest rates in the deal.

Not knowing may be the worst part. With faulty data, consumers “cannot rely” on the credit score they get and as a result “won’t understand how lenders view their credit health.”