A credit score disclosure alerts a consumer about their credit score and other sources of information as required by the Fair Credit Reporting Act (FCRA). The FCRA is a U.S. government legislation that aims to protect consumer information that is collected by consumer reporting agencies or credit bureaus.
The Fair Credit Reporting Act (FCRA) under section 615 states the credit score disclosure requirements for adverse action notice or denial of a loan application, credit application, or extension of credit application based on the information in the consumer report. The first requirement is that an oral, written, or electronic adverse action notice must be provided to the consumer.
The next credit score disclosure requirement is that a written or electronic disclosure must be provided to the consumer or loan applicant. The written or electronic disclosure must contain a numerical credit score. A numerical credit score is used as the basis of any adverse action and represents the information on the consumer report.
Another credit score disclosure requirement is that an oral, written, or electronic disclosure of the name, address, and telephone number of the consumer reporting agency or credit bureau must be provided to the consumer. The consumer must also receive a statement from the consumer reporting agency or the credit bureau that has nothing to do with the adverse action and is unable to provide reasons for the said credit decision.
The last credit score disclosure requirement is an oral, written or electronic notice of the consumer’s right to obtain the following information. The first is a free copy of a consumer report from a consumer reporting agency or a credit bureau. The second is the right to dispute the accuracy and completeness of the information in the consumer report with a consumer reporting agency or credit bureau.
The credit score disclosure regulations are found in section 609 of the Fair Credit Reporting Act (FCRA). Under the FCRA, all consumer reporting agencies or credit bureaus must clearly and accurately disclose to the consumer the following details. The first detail is all information in the consumer’s file at the time of the request. The consumer can also request some information, like the first five digits of the consumer’s Social Security Number (SSN), to be excluded from the disclosure.
Secondly, consumer reporting agencies or credit bureaus must disclose the sources of the information. Sources of information can be excluded if used in producing an investigative consumer report.
Next, consumer reporting agencies or credit bureaus must disclose the identification of each person that obtained the consumer report for the following purposes, such as employment purposes and any other purpose. The name of the person, including the trade name, if applicable, must be disclosed to the consumer. The consumer can also request the address and telephone number of the person.
In addition, consumer reporting agencies or credit bureaus must disclose the dates, original payees, and amounts of any checks based on any adverse characterization of the consumer at the time of disclosure.
Consumer reporting agencies or credit bureaus must also disclose a record of all hard inquiries received by the agency during the last 12 months. The hard inquiries are related to credit transaction or insurance transaction that was not initiated by the consumer.
Lastly, consumer reporting agencies or credit bureaus must disclose a statement that the consumer may request and obtain a credit score if only the credit file is asked for.
The Fair Credit Reporting Act (FCRA) has several credit score disclosure timing requirements. The first requirement is under the free annual disclosures by consumer reporting agencies or credit bureaus. Credit reporting agencies or credit bureaus must provide a consumer report not later than 15 days after the date when the request was received.The next requirement is under the duties of lenders or creditors in risk-based pricing notice or credit decision that has less favorable credit terms than the best material terms of credit offered to most consumers. The disclosure of credit scores must be provided by lenders or creditors at the time of the application or the time of the communication of approval of a credit grant or extension of credit.
Under the Fair Credit Reporting Act (FCRA), a credit score disclosure exception notice from lenders or creditors should inform the consumer of the following information. The first piece of information is about a consumer’s credit report. A consumer report or credit report contains the consumer’s credit history. The consumer’s credit history includes information about the consumer’s payment behavior and the consumer’s overall amount owed to lenders or creditors.
The second piece of information in a credit score disclosure exception notice is information about a consumer’s credit score. A consumer’s credit score is calculated based on the information in a consumer’s credit report. As the consumer’s credit report changes over time, the consumer’s updated credit history reflects a new credit score. A consumer’s current credit score determines the eligibility of a consumer to get credit from lenders or creditors and also the amount of credit to be granted to them by lenders or creditors. A consumer’s current credit score or most recent credit score that was computed by a credit reporting agency or credit bureau to grant credit must also be disclosed to consumers by lending institutions or creditors.
A credit score disclosure exception notice also needs to share data about the range and distribution of credit scores. The range of possible credit scores under the model used to generate the credit score must be disclosed to consumers. Consumers should also be informed about the distribution of credit scores using the said scoring model. The scoring model must be presented as a bar graph of at least six bars. The six bars will show the percentage of consumers with credit scores within the range of scores reflected in each bar.
A credit score disclosure exception notice will also reveal the date the credit score was created and the name of the consumer reporting agency or credit bureau that provided the current credit score.
Lastly, a credit score disclosure contains a section that outlines the rights of a consumer. A consumer has a right to dispute the inaccurate information in the consumer report. The consumer report can be accessed directly from the consumer reporting agencies or credit bureaus for free once every 12 months. It must also contain the contact information of annualcreditreport.com to obtain free annual consumer reports. Annual consumer reports are also provided by the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC).
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