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#1681138 - 03/22/12 06:33 PM Source of Credit Score Disclosure - AAN
Sheldon Hendrix Offline
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Sheldon Hendrix
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Posts: 1,194
South
Is anyone aware of an interpretation or consensus of which credit reporting agency to disclose as the source of a credit score when a reselling credit reporting agency is involved? In other words, if a reseller was involved should the AAN credit score disclose Equifax (for example) even though the report was obtained through a reseller?

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#1681153 - 03/22/12 06:48 PM Re: Source of Credit Score Disclosure - AAN Sheldon Hendrix
waldensouth Offline
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waldensouth
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FINALLY ABOVE the gnat line
We purchase our credit reports via a re-seller. You must disclose the company you purchased them from. They have to have procedures in place to resolve any errors.
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#1681187 - 03/22/12 07:15 PM Re: Source of Credit Score Disclosure - AAN waldensouth
Sheldon Hendrix Offline
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Sheldon Hendrix
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Posts: 1,194
South
Right, as the source of the consumer report itself, but what about the source of the credit score which is also now required. The language in the revised Reg. B model forms appears to create a discrepancy here.

“We also obtained your credit score from this consumer reporting agency,”

The preamble to this recognizes this language as optional, but because it's on the model form most vendors are including it.

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#1681198 - 03/22/12 07:29 PM Re: Source of Credit Score Disclosure - AAN Sheldon Hendrix
Dan Persfull Offline
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Dan Persfull
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Posts: 47,517
Bloomington, IN
I have seen no official interpretation. However:

We obtain a tri merge report from a reseller and they furnish a credit score from each of the CRAs. The reseller provided the score but the CRA that generated (produced) the score is the source of that score, therefore until I see something different we are disclosing the CRA that produced the score in that section of the AAN.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1681280 - 03/22/12 08:59 PM Re: Source of Credit Score Disclosure - AAN Sheldon Hendrix
Sheldon Hendrix Offline
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Sheldon Hendrix
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Posts: 1,194
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Dan, is this a manual fix that you all do, or did you get your form or LOS vendor's help?

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#1681378 - 03/23/12 12:50 PM Re: Source of Credit Score Disclosure - AAN Sheldon Hendrix
Dan Persfull Offline
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Dan Persfull
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Posts: 47,517
Bloomington, IN
Our AANs are not automated.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1681545 - 03/23/12 03:35 PM Re: Source of Credit Score Disclosure - AAN Dan Persfull
RR Joker Offline
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The Swamp
Originally Posted By: Dan Persfull
I have seen no official interpretation. However:

We obtain a tri merge report from a reseller and they furnish a credit score from each of the CRAs. The reseller provided the score but the CRA that generated (produced) the score is the source of that score, therefore until I see something different we are disclosing the CRA that produced the score in that section of the AAN.



Agree. It's the ultimate source, not the vendor you are pulling it through.
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#1690372 - 04/19/12 03:12 PM Re: Source of Credit Score Disclosure - AAN Sheldon Hendrix
banker-12 Offline
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Joined: May 2007
Posts: 1,240
After readind several posts on this subject, I'm starting to think we are not doing it right........We get a tri-merge report from Sarma Mortgage, we are listing the 3 credit reporting agencies under Part II of the AAN and listing either TU, Experian, or Eqfx (depending on which score we used) under "we also obtained your score from this credit reporting agency________". Sarma Mortgage is not mentioned anywhere on the form.

Should we be listing Sarma Mortgage somewhere? Is it incorrect if we disclose it this way?

thanks,

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#1691480 - 04/23/12 02:53 PM Re: Source of Credit Score Disclosure - AAN Sheldon Hendrix
banker-12 Offline
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Joined: May 2007
Posts: 1,240
Does anyone know whether disclosing all 3 consumer reporting agencies is acceptable? The credit report does indicate the sources as being the 3 agencies.

thanks,

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#1691642 - 04/23/12 07:20 PM Re: Source of Credit Score Disclosure - AAN Sheldon Hendrix
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Multiple Scores
Some creditors may obtain multiple credit scores from consumer reporting agencies in connection with their underwriting processes. A creditor may use one or more of those scores in taking adverse action. Section 1100F of the Dodd-Frank Act only requires a person to disclose a single credit score used in taking adverse action.
When a creditor obtains multiple scores but only uses one in making the decision, the creditor must disclose the credit score that it used. Commenters asked what credit score or scores creditors should disclose when creditors use multiple scores in taking adverse action, for example, from different consumer reporting agencies. Section 1100F of the Dodd-Frank Act does not specify what credit score should be disclosed in such cases, but only requires a person to disclose a single credit score that is used by the person in making the credit decision. A creditor would comply with the statute by disclosing any of the credit scores that it used. The Board expects that creditors will have policies and procedures to determine which of the multiple credit scores was used in taking adverse action. For instance, a creditor could have policies and procedures specifying that: (1) when the creditor obtains or creates multiple credit scores but only uses one of those credit scores in taking adverse action, for example, by using the low, middle, high, or most recent score, the creditor would disclose that credit score and information relating to that credit score; and (2) when a creditor uses multiple credit scores in taking adverse action, for example, by computing the average of all the credit
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scores obtained, the creditor would disclose any one of those credit scores and information relating to the credit score.
Because credit scoring models may differ considerably in nature and the range of scores used, consumers would not necessarily benefit if they receive and try to compare multiple scores. Disclosing multiple credit scores could confuse consumers who do not understand the differences, which might lessen the value of the section 1100F disclosures. Moreover, section 1078(a) of the Dodd-Frank Act requires the Consumer Financial Protection Bureau (CFPB) to conduct a study of the different credit scoring systems, and whether these variations disadvantage consumers. The CFPB’s study might develop a record that could serve as the basis for reconsidering this issue in a future rulemaking.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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