TransUnion, Equifax broke federal law by misrepresenting credit score usefulness, CFPB says

Equifax and TransUnion were ordered to pay $17.6 million in restitution to consumers and fines of $5.5 million to the CFPB.

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The CFPB hit on one of the industry's dirty little secrets -- there is no one credit score. Different banks often use different credit scoring models. Meanwhile, the credit bureaus, credit cards and third-party providers like Credit Sesame, Credit Karma and others may provide completely different scores. But they typically don't make it clear that everyone may be singing from a different hymnal. The score that one entity peddles could be useless or even confusing if it's not made clear whether the highest possible score for that model is 850 or 900 or 990 or something else.

TransUnion sells scores based on a model from VantageScore, the CFPB said. "Although TransUnion has marketed VantageScores to lenders and other commercial users, VantageScores are not typically used for credit decisions," the agency said.

Meanwhile, Equifax sells scores to consumers based on its own proprietary model, called the Equifax Credit Score. It's meant to be "an educational credit score," but is not not one generally used by lenders.