CFPB Study: Consumers, Lenders Not Looking at Same Credit Scores

What’s Next. . .

To conduct its upcoming round of research, the CFPB will obtain a database of 200,000 randomly selected, depersonalized consumer records where credit report information and a variety of credit scores (FICO, VantageScore and other educational scores) from each of the CRA’s will be included. The CFPB will then analyze and quantify the variations between credit scores most frequently sold to lenders and those most frequently sold to consumers.

They will evaluate absolute comparisons between the various scores, which is most appropriate when the scores being compared are scaled the same (for example, the same branded score from credit bureau A vs. credit bureau B). Relative comparisons will also be evaluated—a relevant approach when comparing scores that have different score ranges and the scaling is different. Evaluations and comparisons will be made on the entire sample as well as for sub-groups of interest. Possible examples include consumers who are relatively new to credit or consumers who have a history of missed payments.

It will be interesting to see how the CFPB will accommodate in their findings and conclusions the different minimum scoring criteria these various models incorporate, those that result in the outcome that some consumers meet the scoring criteria with some versions, but not others.

No information was provided as to when they anticipate publication of the study results.

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