On February 14, Experian quit making their FICO scores available to consumers – selling them only to lenders. And that’s not good for consumers.
Experian would have you believe that it doesn’t matter – that the PLUS or VantageScore they’ll make available to you is all you need. These are known as “educational scores,” and while they do give consumers an idea about where they stand in the credit world, they are not a true indication of whether any particular individual will qualify for a loan.
The VantageScore, for instance, is so different from the FICO score that the same number on both can mean vastly different things. The VantageScore scale is 500-990, while FICO scores between 300 and 850. Thus the same number that’s signals good credit on FICO can signal poor credit on a VantageScore.
Consumers can still buy their Equifax and TransUnion FICO scores, but without the Experian score, they still won’t know where they might stand with a mortgage lender.
This is because mortgage lenders look at all 3 FICO scores and use the middle one. You could easily have a score of 730 from Experian, 670 from TransUnion, and 710 from Equifax. In this case, your lender would use the middle score, 710, upon which to base your mortgage rate and terms.
Refusing to reveal Experian FICO scores to consumers puts them at a decided disadvantage when dealing with mortgage lenders, car dealers, and even the local furniture retailers.
Why did this happen?
Because Fair Isaac and Experian are doing battle, and you as a consumer are caught in the crossfire. Under the old contract terms, Experian, TransUnion, and Equifax could only sell FICO scores through myFICO.com. Now Experian wanted the right to sell them through their own website, but the two companies could not come to agreement, so Experian decided to end its relationship with myFICO.com.
The reason, however, isn’t important. What is important is that consumers are being denied the right to see the scores that are being used to evaluate – and judge – them.
The FICO score isn’t the only one. In fact, lenders are using “secret scores” in all manner of ways. For instance, bankruptcy scores are used to predict the likelihood that you’ll give up trying to pay your bills and file for bankruptcy.
Transaction scores are even scarier. They’re applied every time you use your credit card. Originally designed to predict the likelihood that a transaction might be fraudulent, they’re now used to watch your spending patterns. If you suddenly quit shopping at high end stores or dining at expensive restaurants, and begin charging groceries at Wal-Mart, and taking cash advances, you will likely see your credit limits slashed and your interest rates increased.
It’s time to let your lawmakers know that the days of hiding data from consumers must end. Each of us has a right to see the scores that are being used against us.
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