Public Policy Implementation to Reduce Credit Score Discrimination: Beyond Enacting Legislation to Reduce Socioeconomic Disparities

Abstract

The credit reporting agencies are to consumers what credit rating agencies are to banks and other vendors. That is to say that, Transunion, Equifax and Experian are the credit reporting agencies (CRA’s) that collect data on consumers and runs risk assessments on the consumers that seek credit on the behalf of their costumers. The credit reporting agencies also allow vendors and lenders to report payment information to them as well. According to the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) there is often erroneous reporting that can occur in the process of reporting data, which negatively affects consumer credit scores. In comparison the Credit Rating Agencies for banks and federal loans Standard and Poor’s provides rating to government entities and banks. Consumer credit is accessed whenever a person seeks credit from a creditor. It is also accessed for some employers and rental properties.

Keywords: Credit Scores, Credit Discrimination, Credit Crisis, Credit Reporting, Accountability, Transparency

JEL Classification: H44, H77, H50, O38, Y40, H60, H70, H83, H63, G02, G28, G32, G38