Borrower credit scores differ when shown to lenders, federal watchdog says
Despite low mortgage rates, it remains difficult for many consumers to secure a loan — lending across the United States fell to a 16-year low in 2011. But for those who have, or think they have good credit, being rejected for a home loan can be nonplussing. According to the Sun Sentinel, that is because credit reporting agencies are giving different scores to lenders than they are to borrowers, a dilemma revealed by a report from the government watchdog, the Consumer Financial Protection Bureau.
In fact, as many as one in five consumers are likely to receive a credit score that differs from the one given to lenders, the Consumer Financial Protection Bureau study found.
“This study highlights the complexities consumers face in the credit-scoring market,” Richard Cordray, the Consumer Financial Protection Bureau director, said. “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.”
To address the problem, the bureau plans to begin supervising about 30 of the largest credit reporting companies. [Sun Sentinel] — Christopher Cameron