I’ve been warning people not to buy their credit scores from the credit 
bureaus, because those scores are not their real scores; that is, they are not the scores used by mortgage lenders. Now the Consumer Finance Protection Bureau (CFPB) has levied a big fine against Equifax and TransUnion for deceiving consumers by selling those scores.
People purchased them in good faith, wanting to know if they qualified to buy a home. But the scores they got were calculated with a different, more generous algorithm, often 20 to 80 points higher than their actual mortgage scores.
Their little scam will cost those two credit bureaus more than $17,600,000. Of that, approximately $13.9 million is to go as restitution to affected consumers. The companies are required to send notification letters to the folks who were taken advantage of. I hope people don’t mistake the letters for junk mail and toss them in the recycle bin.
Going forward, Equifax and TransUnion must make it clear that the scores are good for entertainment purposes only–just kidding. Those scores are good for qualifying for a little plastic credit card, which is not that hard to do. Personally, I would not pay money for that when there are sites that offer free scores for people who want to get an “approximate score.” (Beware that the free scores are not offered as a charity. Those sites will then try their darndest to get you to buy a service or product from them, and they will send you solicitation emails until you get so sick of them that you unsubscribe.)
The third major credit bureau, Experian, was not a part of this action.
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Great post Carolyn. My wife and I experienced this ourselves when we looked up our ‘free’ credit scores through CreditKarma and CreditSesame…showed encouraging credit scores that drove us to apply for a mortgage loan only to be told our ‘actual’ credit scores were 40-50 points less than the advertised ones we were subscribing to!
We advise to NOT rely on these credit scores at all, though the score we purchased through http://www.myfico.com seemed to be accurately reflect what the mortgage lender told us our score was…
Cheers
Thank you for sharing your experience with us, Phil.
these people put a “freeze” on my debit card and a limit of $8k. When I used my debit for $8150 to help pay for a new car the finance dept. found the freeze. My account has almost $60k in it…who are these creeps and how can they freeze my checking account!!??? Oh yeah. I called them and after about 40 minutes of phone tag, I finally got a HUMAN to talk to…well in pigeon anyway…he kept asking the most bizarre “security” questions, like who financed my house 30years ago and what were the payments…(its been paid off for 16 yrs) wanted my checking account number to “verify”, but refused to just answer the question of the reason for the freeze…and WHY there was a freeze on my account in the first place. I am convinced this is a scam…most of his question were entirely inappropriate especially when I had such a simple question.
Meanwhile the car dealer worked around the problem.
Mike, thank you for sharing your experience with us.
not the dealer…it was the Equifax jerks that were trying to mess with me…. the car dealer just reported the freeze to me but financed anyway