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Credit Scoring
LAWDOG is intended to assist in the understanding of basic concepts. See Disclaimer. Always obtain legal advice from legal professionals.
Credit scoring, or risk scoring, and credit predictors, refer to scores or results of analysis, usually by software, of the information contained in consumer agency files. These scores are intended to predict the repayment conduct of a prospective credit customer. These scores are generally not required to be disclosed to consumers.
The creditor may examine past credit history to evaluate how promptly bills are paid, as well as examining other factors, such as the amount of income, whether the consumer owns a home, and the length of employment. For each factor that the creditor considers important, points are awarded by the scoring system. Creditors use scoring as an efficient method for objectively attempting to evaluate which consumers are better prospective credit risks. See a portion of the Fair Credit Reporting Act as amended, reproduced for illustration below.
A Portion of Section 609........
Disclosures to Consumers
(a) Information on file; sources; report recipients. Every consumer reporting agency shall, upon request, and subject to 610(a)(1) [§ 1681h], clearly and accurately disclose to the consumer:
(1) All information in the consumer's file at the time of the request, except that nothing in this paragraph shall be construed to require a consumer reporting agency to disclose to a consumer any information concerning credit scores or any other risk scores or predictors relating to the consumer.
A copy of The Fair Credit Reporting Act, As Amended, and a copy of the FTC Official Staff Commentary to the Fair Credit Reporting Act are included under "Fair Credit Reporting Resources", available from LAWDOG Credit Reporting Center, or here. Use browser return button to return. Read Notices, Caution and Disclaimer.
