I just received an email (form letter) in response to my email to them regarding their stance with E-Loan. See for yourself how Big Brother justifies their refusal to disclose OUR personal scores: http://www.fairisaac.com/disclosurefaq PLEASE send your own feelings about FairIsaac(now there's a contradiction in terms)to CraigWatts@FairIsaac.com I reminded them that TRW (Experian) did not decide to play fair until they were hit with a massive class action suit....anybody interested?
I have read Fair Isaac's FAQs and would like to offer the following analogy: No one really knows how SAT scores are calculated as that's a deep, dark secret zealously guarded by the Educational Testing Service, however you do get a report of your score, so you know what it is. Once you have the score you know whether or not it's reasonable to put forth the effort to be applying to Harvard, MIT, Stanford, etc or whether or not you would be better of lowering your expectations and applying to a less competetive school. If consumers know their credit score they can tell whether they are in the running for the best credit terms on a mortgage and have a shot that low-rate, low closing cost mortgage or whether they should be looking at a lower cost house or set about improving their credit history (like studying harder for the next SAT) before considering buying a(nother) house. Given that FannieMae and FreddieMac have 'floor' scores for certain types of loans, it only fair that people know whether or not they should even bother. Fair Isaac has a vested interest in keeping people' credit score a deep dark secret because it's a more valuable commodity and they can charge more for it. Their argument about people changing their behavior to 'manipulate' the score is specious. They would do things like pay down their credit balances, make their payments on time, not charge their cards up to the maximum, and avoid having accounts placed for collection. Oddly enough, this kind of 'undesired behavior change' smacks of "Responsible use of credit." This would be like putting someone on probation and not telling them what standards of behavior are expects of them, because they might change their behavior and not consume alcohol to excess, not steal things, avoid associating with known criminals, and not take illegal drugs. They might even get a job an support themselves, but God forbid you should give them some feedback and a barometer to let them know how they are doing. People might be encouraged to actually look at their credit reports and have inaccurate information removed via the dispute process in order to improve their score. That would be terrible! Removing inaccurate information from one's credit report! That can't be good at all. Think of all the work those CRAs would have to do. They'd have to actually verify all of those items! And those creditors, whose 5 year old "Was 60s" on a long-closed account that are still hanging around on the newly savvy credit consumer's report, would have to go down into the dusty, dingy archives to dredge out the records to actually verify that. They'd get their nice designer suits all full of cobwebs and grime. Ick! Can't have that now. I think that most people with any common sense can see right through Fair Isaac's propaganda and see what it really is.
You're preaching to the choir here. My question to the board, and to the public in general, is why not sue them in a class action? If it wasn't for the way TRW got nailed we wouldn't have avenues for disputing the CRA's erroneous information. The scoring system is designed to keep people from better products, while lining the pockets of the financial institutions that benefit from over market rates and fees. This looks, feels, and sounds like fraud. Patients used to not be allowed access to their medical files until a class action brought a change. Do you think the FBI willingly decided to give people their information? Nope, it came about because of class action. So far the only protection we seem to have is in numbers, once we lay down and take it we can expect no better. Maybe Hollywood should make a movie out of Orwell's "1984" so people can see what's really going on here. The next great war will not fought over money, weapons, or ideology, it will be over who controls the information. Who's watching the watchers?
I completely agree with you. People should be allowed access to their credit scores. If a class action lawsuit is the best approach to take, I support that. I would be more in favor of amending the FCRA to include a provision that when a consumer requests their report from a CRA that the score be included on the report, along with 'educational' material regarding the interpretation of the score.
O.K. So what bright hungry attorney out there wants to take this on? Legislation would be the best way, but when most, if not all, of our elected officials are in bed with the very corporations that benefit from the system it is unlikely. I think educating the public about what FairIsaac is and how they effect everyone's life is a good place to begin. This would be a good "Dateline" or "60 Minutes" piece.
20 years go, most people were not very knowledgable about their credit. Yes they could get a copy of their report, but generally that was as far as it went. In the past 20 years, there has been an explosion of consumer education ranging from boards such as these to "credit repair clinics". Because people learned about their credit reports, they were able to manipulate them to some extent. That is, in my opinion, why scores were developed. Scores are today what the raw reports were 20 years ago - people may or may not know what is is, but they do not know what to do to manipulate them. When, not if, consumers eventually get the right to see their score whenever they want, they will eventually be able to "crack" the algorithm and, in the process, manipulate their scores. When this happens, the industry will simply come up with another mechanism and the process will repeat (secret rating, forced disclosure, consumer manipulation, new method). Just my opinion.
I certainly agree with you about the ongoing process as people become more savvy about credit and credit reporting. There are some score manipulation techniques that are quite well known now. If you have $5000 outstanding on one card and have 3 other cards with no balance, spreading the $5000 over the 4 cards and paying on them will increase your score. More active trade lines and lower ratio across 4 cards. Taking out an installment loan with terms of 3-4 year and then paying it off within a couple of months will bump the score up another couple of points as well as installment loans are weighted slightly more heavily than revolving credit. Paid installment loans rated R1 (Never late) are golden. Strictly limiting the number of inquiries made to only those that are absolutely necessary will also improve your score. Additional inquiries above 2 or 3 will erode the score. Concentrating on the basics like paying your bills on time and not overextending yourself will do the most good to raise your score in the long run though.
The above information is empirical data based upon experimentation with my own credit situation for the past 3 years. I have a very good friend who is a mortgage broker and can get my scores easily enough through a pre-qual. 60-90 days later I can get the inquiries removed because they don't keep any records on inquiries they pull for a pre-qual (versus an app) and they can't verify it. I don't claim this to be a scientific method as the siutation was not conducted as a controlled experiement and the total outstanding balance fluctuated (+/-10%), but spreading ones outstanding debt over several cards definitely improves the score as opposed to concentrating it all on one or two cards. One has to judge for themselves whether the additional cost (balance transfer fees, potentially higher interest rate) is worth it to get a couple of extra FICO points. It might be if one is about to apply for a mortgage and needs a couple of extra points to qualify for lower pricing. Also please note that the techniques I've described are not going to turn a 580 into a 730. You can't polish a turd. If one has any big degoratories in one's file like a recent BK, charge-off, or upaid collection or judgement, one isn't going to get anywhere near 700. The last time I rebalanced everything in January, I went from just below 680 to 706. I know I had dipped below 680 because I got a rate change notice form FirstUSA and 680 is (or was at the time, (Dec 99: their last AR INQ before receiving the notice)) their magic number for yanking the 9.9% fixed rate from you. I got the 706 from e-loan in early March when they were disclosing FICO scores. The last two paragraphs in my post about limiting inquiries and paying bills on time are just common sense.
