Credit bureaus sometimes provide Americans with credit scores that are different from those that lenders use in deciding whether to offer a loan and at what interest rate, the government’s consumer watchdog found in a study released Tuesday.
Researchers at the Consumer Financial Protection Bureau found that the discrepancy happens for as many as one in four people.
The consumer agency issued the study five days before it will begin supervising credit-reporting firms. That will give the bureau oversight of about 30 companies that make up the majority of the $4 billion industry.
Credit agencies have come under greater scrutiny as consumer advocates question the accuracy of the scores, which affect the ability to get a mortgage, car loan, credit card and sometimes even a job. The scores aim to measure the likelihood that a consumer would repay a debt based on his or her record.
Given the widespread use of the scores, even small variations can have huge consequences. Discrepancies could lead some lenders to deny applicants student loans or mortgages, or offer terms that are worse than warranted, the study concluded.