Compliance Alliance Question of the Week

Question:
We request a tri-merge credit report for each applicant. Our credit decision is relies on the single lowest middle score applicant(s). Can you give guidance on how credit scores would be reported for two or more applicants? Do we report the one score relied on for all applicants, or report the score relied for one applicant and then the other as not applicable?
 
Answer:
The bank would report the credit score that it relied upon in making the decision. From what you described, it sounds like it would be the lowest middle score in this instance. The score would be reported for the applicant or co-applicant and not applicable for the one whose credit score was not used (since it wasn't relied upon in making the credit decision).
 
To illustrate, assume a transaction involves one applicant and one co-applicant and that the financial institution obtains or creates two credit scores for the applicant and two credit scores for the co-applicant. Assume further that the financial institution relies on a single credit score that is the lowest, highest, most recent, or average of all of the credit scores obtained or created to make the credit decision for the transaction. The financial institution complies with § 1003.4(a)(15) by reporting that credit score and information about the scoring model used for the applicant and reporting that the requirement is not applicable for the first co-applicant or, at the financial institution's discretion, by reporting the data for the first co-applicant and reporting that the requirement is not applicable for the applicant.
Comment 3, 1003.4(a)(15), https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/Interp-4/#4-a-15-Interp-3