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Risk-Based Pricing Notice Template
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Risk-Based Pricing Notice Template
[Creditor Name]
[Creditor Address]
[City, State, ZIP Code]
[Email Address]
[Phone Number]
Date: [Date]
To: [Consumer Full Name]
[Consumer Address]
[City, State, ZIP Code]
Subject: Risk-Based Pricing Notice
Dear [Consumer Name],
1. Notice of Risk-Based Pricing
We are providing this Risk-Based Pricing Notice in connection with your [loan application / credit application / extension of credit / account opening].
We reviewed information from a consumer report in connection with your credit request or credit offer. Based in whole or in part on information from that consumer report, the material terms of credit offered to you are or may be materially less favorable than the most favorable material terms available to other consumers from us.
2. Information About Consumer Reports
A consumer report includes information about your credit history and other credit-related information. This information may include payment history, account balances, credit usage, collection activity, public record information, and other data used in credit decisions.
3. Your Right to Review and Dispute
You are encouraged to verify the accuracy of the information contained in your consumer report.
You have the right to dispute directly with the consumer reporting agency any information in the report that you believe is inaccurate or incomplete.
4. Consumer Reporting Agency Information
The consumer reporting agency that provided the report used in connection with this notice is:
Name of Consumer Reporting Agency: [Agency Name]
Address: [Agency Address]
Toll-Free Phone Number: [Agency Phone Number]
Website: [Agency Website]
Please note that the consumer reporting agency did not make the credit decision and cannot tell you why specific terms were offered to you.
5. Free Copy of Your Consumer Report
Federal law gives you the right to obtain a free copy of your consumer report from the consumer reporting agency identified above if you request it within 60 days after you receive this notice.
You may request your free report by contacting the consumer reporting agency using the contact information listed above.
For more information about consumer reports and your rights under federal law, visit: [www.consumerfinance.gov/learnmore]
6. Credit Score Information
Complete this section only if a credit score was used in setting the material terms of credit offered.
A credit score is a number that takes into account information in a consumer report. Your credit score was used in setting the terms of credit offered to you. Credit scores can change over time based on changes in your credit history.
Credit Score Used: [Score]
Range of Possible Scores Under the Model Used: [Range]
Date Credit Score Was Created: [Date]
Provider of Credit Score: [Credit Reporting Agency or Other Source]
Key Factors That Adversely Affected Your Credit Score:
[Key Factor 1]
[Key Factor 2]
[Key Factor 3]
[Key Factor 4]
[Key Factor 5, if applicable]
7. Credit Terms Reference
This notice relates to the following credit product or account:
Credit Product: [Loan / Credit Card / Line of Credit / Other]
Application or Account Number: [Number, if applicable]
Relevant Pricing Term(s): [APR / finance charge / annual fee / deposit / other]
This notice is provided for disclosure purposes and does not by itself change any separate credit agreement or other document you may receive.
8. Contact Information
If you have questions about this notice or the credit terms offered by us, please contact:
Contact Name or Department: [Name / Department]
Phone Number: [Phone Number]
Email Address: [Email Address]
Mailing Address: [Address]
9. Signatures
Sincerely,
Signature: __________________________
Name: [Authorized Representative Name]
Title: [Title]
Company: [Creditor Name]
Date: [Date]
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Risk-Based Pricing Notice Template
Risk-Based Pricing Notice Template FAQ
What is a risk-based pricing notice?
A risk-based pricing notice is a consumer notice used when a creditor uses a consumer report and, based in whole or in part on that report, offers credit on material terms that are materially less favorable than the most favorable terms available to a substantial proportion of other consumers. CFPB Regulation V also provides model forms for these notices, including versions used when a credit score is part of the pricing decision.
Why do you need a risk-based pricing notice?
You need a risk-based pricing notice to inform the consumer that consumer-report information affected the terms offered and to tell the consumer about the right to review and dispute report information. The rule also requires key disclosures such as the reporting agency information, how to obtain a free report, and, when applicable, credit score details.
When should you use a risk-based pricing notice?
Use this notice in consumer credit situations when the rule applies and the creditor is offering materially less favorable credit terms based on consumer report information. Under the regulation, timing generally depends on the credit product, but for closed-end credit the notice is generally provided before consummation, and for open-end credit before the first transaction; the rule also includes exceptions and alternative compliance methods in some situations.
How to write a risk-based pricing notice?
Start with the creditor and consumer details, then state that consumer-report information affected the credit terms offered. Include the consumer reporting agency details, explain the consumer’s right to obtain a free report and dispute inaccuracies, and add the CFPB information reference. If a credit score was used in setting the material terms, include the score used, score range, key adverse factors, score date, and the source of the score.
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