Multiple credit scores causing confusion for consumersPosted: Updated:
PEORIA, Ariz. - Mary Wilson's credit score dropped 100 points when her home was foreclosed on a year ago.
“I was warned about that,” she said. “That wasn't a big surprise to me.”
Since then, she's worked hard to rebuild her credit, like paying bills on time and paying more than the minimum.
She even began paying a company to monitor her credit.
“But besides that it helps to see the scores. Either it's going up or down and mine was going up and up and up,” she said. “It kinda gives you hope, I guess.”
With a credit score now safely in the 700's, Mary thought she'd be able to refinance her car which could’ve saved her $200 a month.
“It was huge. Huge!” she said. “I'm going to save $200 a month. I'm not even working right now. $200 a month is everything.”
But even though credit scores Mary obtained showed she had at least a 704, the lender showed she had a 670.
“And that is a huge difference in the credit world between a 670 and a 704,” she said.
Mary now wonders whether all her hard work was worth it.
“It’s frustrating,” she said. “it’s confusing and it makes you angry.”
A recent report by the Consumer Financial Protection Bureau examined problems like Mary's to find out why credit scores sold to consumers are so different from those used by lenders.
Mike Sullivan is with Take Charge America, a credit counseling agency, and says consumers need to know credit scores change daily, and that lenders often request specific credit reports that aren't even available to consumers.
“So it's extremely difficult to take more than just a guess at what your real credit score is if there is such a thing,” Sullivan said.
He says the Consumer Financial Protection Bureau is likely to suggest regulations to try to clear up credit score confusion, but have not done it yet.
So for now, he says consumers have to live with the possibly two different credit scores.
“Most consumers think that transparency is a good thing and right now credit scores have very little transparency,” Sullivan said.
As for Mary Wilson, she never was able to get her car refinanced because the bank considered her a high risk.
But she's not giving up, saying she'll continue to improve her credit and try to refinance again in six months.
Consumers can get one free credit report per year by logging on to www.annualcreditreport.com. But keep in mind, you are required to pay to get your actual score.