The Fact Act Risk Based Pricing Rule, issued by the Federal Reserve Board and the Federal Trade Commission, requires any company that uses a credit report or score in connection with a credit decision – including companies such as banks, mortgage bankers, auto lenders and retailers – to send notice to a consumer when, based on a credit report or score, the company grants credit on "material terms that are materially less favorable than the most favorable terms available to a substantial proportion of consumers." It essentially requires lenders to notify consumers when they charge consumers more for credit based on the consumers’ credit reports. The requirement was motivated by a concern that, because consumers are entitled to "adverse action" notices under the FCRA only when they are denied credit (or do not accept a counteroffer for credit), consumers are not adequately apprised of the effect of credit reports on the pricing of credit. The final rule was published on January 15, 2010.
To help the financial community comply with the Risk-based Pricing Rules, TransUnion has made two solutions available for lenders. These options fully support the credit score disclosure exception notice model forms in the Rule and are designed to help consumers understand how their credit scores compare to the scores of other U.S. consumers.
- First, TransUnion has provided both score distribution graphs and score interval tables to assist in generating credit score disclosure exception notices.
- Second, TransUnion has created the Score Percentile Ranking as an add-on service to the credit report, enabling financial institutions to produce credit score disclosure exception notices without the added time and expense of maintaining multiple score distribution graphs. See General Announcements 90 and 96 for details about the Score Percentile Ranking solution.
Each file contains a Terms and Conditions page. The graphs are zip files consisting of a graph in .pdf format and a graph in .jpg format for each score model referenced. The tables are Excel spreadsheets.