A Policy Framework for Regulating Credit Scoring Service Fees: An Empirical Model

Document Type : Research Paper

Authors

1 Department of Theoretical Economics, Faculty of Economics, University of Allameh Tabataba’i, Tehran, Iran.

2 Department of Financial Engineering, Faculty of Industrial Engineering, Amirkabir University of Technology, Tehran, Iran.

3 Department of Financial Economics, Faculty of Economics, University of Imam Sadiq, Tehran, Iran.

Abstract

This study aims to design an empirical model to determine maximum service fee rates for credit scoring companies within Iran's financial system. With the expansion of these companies' services, and in accordance with the Fair Credit Reporting Act (FCRA) in the United States, establishing a fair pricing framework—particularly for services related to end consumers—has become critically important. Recent regulations, including the 2023 Law on Financing Production and Infrastructure, have created a dual operational structure: Type I companies utilize sovereign national data to produce official credit reports and scores, while Type II companies leverage complementary non-governmental data from fintech platforms, telecom operators, and financial institutions to provide specialized assessments. The research employs a descriptive-analytical approach through empirical modeling. The proposed model calculates base service rates by allocating companies' actual operational costs—covering human resources, technical infrastructure, and cultural expenditures—plus a 30% profit margin. It further incorporates adjustments for supplementary data usage in final pricing. This framework enables equitable pricing calculation for three core services: credit reports, credit scores, and credit improvement advisory services. The developed model serves as a practical tool for regulatory bodies to balance credit scoring companies' economic sustainability with consumer protection. By providing transparent pricing mechanisms, it promotes consistency and fairness throughout the credit scoring ecosystem, ensuring both company viability and consumer rights protection within Iran's evolving financial landscape.

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References

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History

  • Receive Date: 05 January 2026
  • Revise Date: 19 February 2026
  • Accept Date: 17 April 2026

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