Credit scores…do we really understand where they come from and how they are used? A study just released by researchers at the Consumer Financial Protection Bureau found that credit bureaus sometimes provide Americans with credit scores different than those used by lenders in as many as one out of four times. The study was based on a random sample of 200,000 credit files from the three major credit reporting agencies – Experian, TransUnion and Equifax.
The Consumer Financial Protection Bureau will now begin supervising credit-reporting firms…about 30 companies. Another layer of bureaucracy required because these firms cannot be relied upon to self monitor. And what is the benefit to being inconsistent? It’s not too difficult to provide the same information to the consumer that you are providing to the lender.
Now that consumers are well informed about the necessity to monitor their credit scores, it’s only fair they receive the same information. Credit scores are used in determining who does and doesn’t get a loan, what your interest rate will be, etc. Really important factors. To both the borrower and the lender. Let’s get it right…and be consistent.