A reason to cheer the CFPB
|Jim Henry is a special correspondent for Automotive News|
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The Consumer Financial Protection Bureau has given auto lenders a lot to worry about in the past year, though so far, its bark has been a lot worse than its bite.
Even so, in a Sept. 25 press release, the CFPB said it's concerned because "one out of five" consumers get potentially misleading scores when they check their own credit scores.
That's partly because consumers get a generic credit score when they order one for themselves. The generic score can be significantly different than specialized scores for particular industries, including the auto industry. Auto lenders can request a special auto score, on which they partly base their credit decisions, the CFPB said.
FICO auto scores, however, correlate highly with generic FICO scores, according to the CFPB. So customers who review their own FICO scores are probably going to get a realistic idea of the score that really counts as far as auto lenders are concerned.
So there's a bit of positive input from the CFPB, for a change. All information that helps consumers better understand their auto credit scores helps dealerships in the long run.
You can reach Jim Henry at firstname.lastname@example.org.