What the government is saying about getting a credit score
A recent study by the Consumer Financial Protection Bureau (CFPB) found some en-lighting facts about the credit score industry.
First, the credit score industry is a high lucrative industry. The business of providing credit scores and credit monitoring generates over $1 billion dollars in annual revenue.
Second there are a ton of credit scores each with potentially different scoring models. This makes it difficult for a consumer to really know what is going on and how a lender might potentially view their creditworthiness. This could potentially hurt the consumer as they make a purchasing decision based what think their credit score is and come to find out that the lender has a different score. If denied the consumer has wasted time and possibly application fees. The consumer as has the potential to be approved for the loan but at a higher interest rate. This is something that will cost more money in the long run.
Is there an answer that will help consumers. Currently there really isn’t. Each individual must protect their score and frequently check their score to get some kind of idea to where they are at. Another fact that was pointed out was that most consumers have little knowledge on what a credit score is actually used for. This a fact everyone should know.
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