CFPB Issues Focus Group Report on Credit Reports and Scores

The CFPB has issued a report on credit reports and scores based on its focus group results.  We summarize it in 300 words or less:

Findings Based Upon the Focus Group Sessions:

• Many consumers do not take advantage of free annual credit reports
• Many consumers are confused and frustrated by consumer reports and scores
• Many consumers do not understand the difference between soft and hard inquiries or pulls and the impact they may or may not have on their credit scores
• Many consumers are confused by the trade line names found on their credit reports
• Many consumers pull their credit report out of a concern with identity theft and fraud
• Consumers who are more engaged in the financial system tend to check their credit reports and scores more often
• Many consumers believe their credit reports are difficult to understand

The CFPB Identified Several General Messages that Need to Be Conveyed to Consumers:

• Checking credit reports on a regular schedule can be a valuable financial management tool
• Annualcreditreport.com provides consumers with access to free credit reports once a year as mandated by federal law
• Checking credit reports once a year through annualcreditreport.com will not hurt your credit score
• There are multiple credit scoring systems created by companies
• Lenders may use different credit scoring systems than what consumers typically can access
• Consumer’s financial actions play a major role in their credit scores
• Checking credit reports on a regular schedule can help identify potential fraud and identity theft