What must be included in the risk-based pricing notice?

The risk-based pricing notice is a crucial component in the context of the Fair Credit Reporting Act (FCRA), ensuring transparency in credit transactions. The correct answer encapsulates several key pieces of information that must be included in this notice.

When a consumer is treated less favorably than others due to information in their credit report, they must receive a risk-based pricing notice if credit is extended. This notice serves to inform them of the specific credit score used in the lending decision, the credit scoring model utilized, the name of the Consumer Reporting Agency (CRA) that provided the credit score, and the date the score was created.

Including the credit score is vital as it gives the consumer insight into how their creditworthiness was assessed compared to others. The date the credit score was created helps the consumer understand the relevance and currency of the information, acknowledging that credit scores can change over time. Furthermore, specifying the CRA informs the consumer where they can obtain their credit report to review the information on which their score was based.

By requiring all these elements, the risk-based pricing notice enhances transparency and aids consumers in understanding the factors influencing their credit decisions, thereby fostering a more informed consumer base.