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Which credit score should be reported and where on the Loan Application Register (LAR) should it be reported where there are more than two applicants and the bank uses the lowest credit score?

Which credit score should be reported and where on the Loan Application Register (LAR) should it be reported where there are more than two applicants and the bank uses the lowest credit score? For example, assume that Applicant A is the primary applicant and has a credit score of 790, Applicant B’s is 745, and Applicant C’s is 685 and that the bank uses the lowest score (Applicant C’s score).

Pursuant to Comment 3 to §1003.4(a)(15) of Regulation C, the creditor should report the “credit score for the applicant that it relied on in making the credit decision,” in this case Applicant C. The financial institution complies by reporting the credit score 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.” Thus, it may report Applicant C’s score in the applicant or co-applicant field.

Creditors only report two applicants — the applicant and one co-applicant. The implication appears to be that the creditor should treat as either applicant or co-applicant the applicant whose scores is relied on, even if the creditor did not originally designate that applicant as applicant or first co-applicant in its system. (July 2018)

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