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SALT LAKE CITY — A Utah legislator claims credit bureaus are lying to consumers about the credit scores they sell.

Rep. Paul Ray, R-Clearfield, said the credit scores consumers purchase often are so-called educational scores and not the credit scores that lenders use. Ray is using a long-time Utah credit expert, Al Bingham, to try to force credit bureaus to change their ways.

Bingham said there are different types of credit scores. Lenders most often use FICO scores, and the difference between those and educational scores can be enormous.

"Thousands of dollars," he said. "It's huge, and the consumer doesn't recognize it because it's so complex."

Last fall, the new federal Consumer Financial Protection Bureau analyzed the differences between educational and FICO scores.

That (educational) score has no value to me, not to any lender. It has no value. –Al Bingham

In its study of 200,000 credit reports, the agency found educational scores were close to FICO scores 42 percent of the time, at best. At worst, it was close 36 percent of the time. That's why Bingham wants the educational score eliminated. "That score has no value to me, not to any lender. It has no value," he said.

In some cases, the scores were off by at least two or three brackets. That means consumers may apply for loans for which they don't qualify or pay much higher interest than expected.

"On a $200,000 mortgage, it's thousands of dollars. On an auto loan, it could be a couple of thousand dollars extra in total payments," he explained.

"I think 99 percent of Utahns are not aware of the different scores," Ray said.

Credit score v. credit report "It is more important to get and review your credit report, which you can do at no cost to you at AnnualCreditReport.com than to buy your credit score. The information in your credit report influences your credit score. Even if you do buy your credit score, it is likely that the score the lender buys will be different from the score that you buy."

-Consumer Financial Credit Bureau What is a credit report? A credit report contains information about your credit history and the status of your credit accounts.

What is a credit score? A number that is used to predict how likely you are to pay back a loan. It starts with information from your credit report. A mathematical formula is used to create your credit score. There is no "one" credit score; there are many credit scoring formulas available to you as a consumer as well as to lenders.

More information: Consumer Financial Credit Bureau

He wants to change that, but it has not been easy going up against what he calls the power of the credit bureau lobby in the Utah Legislature. A House committee unanimously passed his disclosure bill, HB158, but it was a different story in the Senate.

Ray arranged for Bingham to make a presentation to the Senate Revenue and Taxation committee, but that got nixed at the last moment by Sen. Curtis Bramble, R-Provo.

"There was a lot of pressure," Ray said. "There was a lot of bullying, to be quite honest, from Sen. Bramble to the committee and to myself to try to kill this."

In a phone interview, Bramble said the general consensus was the bill would be voted down. But Ray said things would have turned out much differently if the presentation had been allowed.

"I think had he let Al give the presentation, that the bill would not have failed the committee," Ray said.

He said if the bill had become law it would have cost the credit reporting agencies billions of dollars.

"Would you go buy a credit score that you knew was incorrect?" he asked. "The answer is no. The public isn't going to pay for that."

Bramble said the credit industry raised enough concerns about consumer confusion, and it worried about giving away secret formulas used for credit scores, so that he tabled the issue for further study.

Ray said he has the support of the Utah Attorney General's Office, and he's asked for an investigation of credit bureaus for communication fraud.

He said when credit bureaus appear on TV and radio claiming consumers can buy "educational" credit scores for financial needs, they're knowingly misleading the public and making money off it.

He'll also take up his bill in the next legislative session.

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