CreditNet FlashBack !!!

We've come a long way baby !!!

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2000/04/06/BU21650.DTL



Credit Bureau Cuts Off E-Loan's Access
Internet lender allowed customers to see scores

Sam Zuckerman, Chronicle Staff Writer
Thursday, April 6, 2000

A major credit reporting agency has forced Internet lender E-Loan to stop giving consumers a peek at one of the most jealously guarded secrets in financial services -- their individual credit scores.

Equifax, one of the nation's three big credit bureaus, cut off E-Loan's access to the data Monday, six weeks after the Dublin mortgage provider began letting its customers pull up their own credit scores online.

The incident marks the latest episode in the credit-reporting industry's long-standing battle to keep sensitive credit information out of the hands of consumers. ``They have consistently fought federal efforts to require disclosure of credit scores,'' said Consumers Union senior attorney Gail Hillebrand.

Credit scores are numerical ratings that calculate the likelihood a borrower will repay a loan based on the consumer's past financial record. Designed by Fair, Isaac, the San Rafael financial software company, they are the most important tool lenders use when deciding whether to offer a customer credit.

Until E-Loan put the scores online, consumers generally could learn their ratings only under special circumstances, such as when they got turned down for loans. ``This was the first time consumers had ever been granted ready access to their own credit scores,'' said E-Loan Vice President Sharon Ruwart.

E-Loan said 20,000 customers opened accounts after it made the data available.

Fair, Isaac and the credit bureaus protect credit scores like the family jewels. Equifax apparently regarded E-Loan's distribution of the data as a slap in the face.

After failing to persuade E-Loan to stop posting credit scores, Equifax turned on Credit InfoNet, the vendor that sells Equifax data to E-Loan, demanding that the company stop giving credit scores to E-Loan, said Tom Midkiff, Credit InfoNet's chief executive.

When the Credit InfoNet didn't immediately comply, Equifax shut off the flow of all data to the company Sunday, leaving the vendor unable to serve any of its 700 customers for parts of two days. Equifax restored service when Credit InfoNet agreed to stop giving E-Loan credit scores.

``They strong-armed me to cut off credit scores to E-Loan,'' Midkiff complained.

Equifax, based in Georgia, did not return calls seeking comment.

E-Loan resumed distributing credit scores yesterday using another credit bureau, but that service could be suspended, too. E-Loan declined to identify the bureau, but industry sources said it was Trans Union. Meanwhile, E-Loan contends that Fair, Isaac pressured Equifax and was the real agent behind the data cutoff.

For its part, the San Rafael company admits it pressed the credit bureau to act, noting that its contracts with Equifax, Trans Union and Experian, the third credit bureau, specifically bar them from supplying consumers their credit scores under most circumstances.

``We have consistently encouraged the credit reporting agencies to enforce the contracts,'' said Craig Watts, Fair, Isaac's consumer affairs manager.

Fair, Isaac said it doesn't want consumers to see their credit scores because it fears they will misinterpret the numbers. ``Consumers need additional information and counsel from a lender to truly understand their credit situation,'' said Watts.

The credit industry also worries that consumers will take shortcuts to jack up their credit scores, just the way some students cram for college entrance exams. That could cheapen the value of the data.

Consumer advocates counter that the credit industry simply doesn't want consumers to cast a critical eye on how a number that could seal their financial fate is determined. ``They just don't want the scores demystified,'' said Hillebrand of Consumers Union.