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If you don’t live in Utah you probably have never heard of Representative Paul Ray. And, you’ve probably never heard of H.B. 158, more commonly referred to as the Consumer Credit Protection Amendments. The bill, if passed into law, would modify Utah’s Consumer Credit Protection Act, which I believe is their version of the Fair Credit Reporting Act. States have their own version of that Federal statute.
This bill is especially interesting because of the language on page 5, which is the “Credit Score Disclosure Requirements” provision. That provision would require that when a consumer requests their credit score from a credit reporting agency and the credit reporting agency provides a credit score that is NOT a lender credit score that the credit reporting agency must disclose that fact to the consumer using this language (or a reasonable derivative):
“This credit score may differ substantially from the credit score used by a lender for the approval of a residential mortgage or other loan. The Consumer Financial Protection Bureau has warned that this credit score may greatly misrepresent a lender’s assessment of your creditworthiness. Based on the score actually used by a lender, you may be offered less favorable terms that are more costly to you.”
If the consumer reporting agency is also a lender and the consumer reporting agency provides the consumer with a credit score that is not a lender credit score that the consumer reporting agency uses when deciding whether or not to grant credit then they must disclose the following:
“This credit score is different from the credit score we use to evaluate whether to grant and extension of credit. The Consumer Financial Protection Bureau has warned that this credit score may greatly misrepresent our or another lender’s assessment of your creditworthiness. Based on the credit score that we would actually use, you may be offered less favorable terns that are more costly to you.”
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Credit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, founder of www.creditexpertwitness.com and a Contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. You can follow John on Twitter here.
