WASHINGTON (CN) – Creditors who use risk-based pricing to charge consumers with bad credit histories more for access to credit will have to reveal the score used to make the pricing determination, according to amendments to the Fair Credit Reporting rules adopted by the Federal Reserve and the Federal Trade Commission.
Rules adopted to implement the Fair Credit Reporting Act already require creditors to notify their customers if they use risk-base pricing models.
The amendments require the companies to disclose the specific credit score they used if a consumer is charged more for credit than the average consumer, the name of the agency that provided the score, and the day the score was obtained.
The creditors also would have to explain the key factors adversely affecting a consumer’s credit score.
The new amendments implement requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act.