My son recently applied to rent an apartment, and when I became a guarantor on his lease, the landlord needed to run a credit check. Utilizing my banks’ tools, I saw that my credit scores were within two points of each other. Then, I received my score from the rental property agency — and I was surprised to find that it was 80 points lower.
Credit scores vary widely for a variety of reasons. Institutions use different scoring algorithms — and even different versions of the same scoring algorithm. Lenders have different schedules for reporting credit information to credit bureaus. Customers use their credit products daily in ways that impact their credit scores. Bureaus record the information in different ways and create different variables. Ultimately, these disparities have big impacts on individuals’ interest rates, interest terms, and the amount of credit lent.
To get to the bottom of my credit score disparity, I contacted the credit bureau that sent me my lowest score. Unfortunately, there was no option to speak to a representative.
Surprising Truths about Our Customers’ Complaints
With no one present to listen to customer voices, I decided to explore how customers are responding to credit score disparities using the PositivityTechⓇ intelligent platform. Here is an example of one customer’s complaint:
“I have been trying to repair my credit for the last year [because] I am trying to buy a home. However, the three credit bureaus have been reporting different credit scores… [one] seems like it takes 30 to 40 points off my score and drops it way back down… All my payments and credit cards are all paid up and I only get a 3 to 4 points increase. That’s just not right and I want this fixed.”
By assessing over one million complaints in the PositivityTech platform, we identified surprising findings about customer complaints related to credit score disparities that financial institutions are likely missing.
- The Inaccuracies of Off-the-Shelf Sentiment Scores
A widely used off-the-shelf sentiment score, which is not built on customer language about banking products, assigned a positive score to a complaint about credit score disparities and missed the customer’s discontent. In contrast, our proprietary Severity Score, which has a lexicon built on financial language, assigned a negative score to the same complaint — confirming what we intuitively know.
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- Off-the-Shelf Sentiment Score: +0.98
- Proprietary Severity Score: -0.96
- Worse than Average Severity Scores
Customer complaints related to credit score disparities have a proprietary Severity Score that is 30% worse than the average complaint’s Severity Score.
- Duplicate Complaints
By using the PositivityTech platform, I quickly found that customers with disparate credit scores submit duplicate complaints — copying and pasting the same complaint to multiple financial institutions. This further emphasizes the severity of their complaints.
Flip the Script on Customer Complaints about Credit Scores
Fortunately, I was able to be a guarantor on my son’s lease, so my credit score disparity did not disrupt my son’s plans. Yet, credit score disparities do negatively impact individuals’ life decisions every day.
Ultimately, the issue of credit score disparities does not lie with one institution, and the solution is complex. By listening to their customers, financial institutions have the opportunity to flip the script on these and other customer complaints. Let us show you how.
Feel free to message me on LinkedIn. I look forward to speaking with you.