Thursday, February 19, 2015

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
  • provides consumers with access to free credit reports once a year as mandated by federal law
  • Checking credit reports once a year through 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

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