The Consumer Financial Protection Bureau (CFPB) is at it again, but this time the end result should offer direct improvement to many consumers.

The Dodd-Frank bill specifically obligated the CFPB to study the three major credit bureaus to see if the credit scores they sell to consumers matched the scores that they provide lenders.  After reviewing over 200,000 transactions, the CFPB found that in many cases the scores did not match.

What?  Yes, this is true.

In some cases, consumers did not know their score was worse than they thought, and thus were unaware that a credit mishap was being reported to outside companies; and in some cases people had better credit than they thought.  This causes people to not pursue lines of credit or to pursue more expensive types of credit because they think that’s all they will be approved for.

Other findings from the study include:

Some background first; for purposes of the study credit scores were placed into one of four quality categories ranging from excellent to poor.

One in four credit reports reported a different category score to the consumer than was reported to a lender.  That is a huge number.  Most were off by just one score category, but up to 3% were off by two categories or more.
No conclusions could be drawn as to whether certain groups were affected more than others, although the data indicated there more discrepancies for people with higher incomes.

Consumers cannot know ahead of time if they will be in the unlucky 25% who get incorrect scores, therefore the Bureau recommends that a warning should be given to all consumers warning them that the score given to them may not accurately reflect the credit score that is provided to lenders.