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July 20, 2011 – The credit scores that are available for purchase by consumers may vary from the score used by a lender to make credit decisions due to a variety of reasons, according to a report released yesterday by The Consumer Financial Protection Bureau.

The CFPB, which assumes its regulatory authorities Thursday, issued yesterday's report in line with a Dodd-Frank Act requirement that it study differences between credit scores purchased by consumers and the ones used by creditors to ascertain consumers' credit risk.

The report's topics include the development of credit scoring models, how creditors use the models and reasons why consumers may receive different credit scores than creditors. It indicated that credit scores vary for several reasons.

Those include:

• use of different scoring models;
• lenders and consumers may not use the same consumer reporting agency;
• data in the consumer's credit reports change between the time the consumer purchases a score and the time the lender obtains the score; and
• consumers and lenderscould possibly access different reports from the CRA.

The CFPB report also noted a lack of understanding among consumers about credit scoring. For instance, nearly half of the consumers the bureau surveyed said they did not know that a credit score represents the risk of not repaying a loan. The bureau is planning a follow-up to yesterday's report.