Now that TransUnion has officially adopted Fair Isaac's FICO 08 score (see story), I have a suggestion for Fair Isaac and TransUnion: move into the 21st century on the FICO score that's provided to consumers.
For now, consumers who pull their TransUnion FICO scores through Fair Isaac's myfico.com or TransUnion's Consumer Solutions site (link here) are getting scores that are based on Fair Isaac's 1998 scoring model, or Classic 98. Not only is the score based on a model that's long in the tooth, lenders are mostly working from Fair Isaac's Classic 04 model now. As such, consumers are essentially pulling a score that is -- putting it mildly -- fairly useless.
Indeed, as of right now I consider the TransUnion FICO consumer score about as useful as any number of scores that I often -- and derisively -- refer to as FAKO. Indeed, it's about as useful as the scores that TransUnion peddles with its TrueCredit credit monitoring product. And you know how useless those scores are (see story here).
Given how outdated the consumer version of the TransUnion FICO score is, and given the fact that creditors have been using Classic 04 to make lending decisions for some time, I've been wondering why TransUnion and myFICO haven't pushed for a transition to Classic 04. "myFICO and TransUnion do plan to tap the '04 model for scores provided to consumers, and for the reason you indicated," Barry Paperno, consumer operations manager for Fair Isaac, told me. "We expect that transition to take place soon." I don't know how fast "soon" is, but it can't come soon enough. It's silly for consumers to rely on a model that most lenders aren't using.
In the meantime, until Fair Isaac and TransUnion update the consumer version of the score they sell to the public ("soon"), I will admonish my readers to refrain from pulling their TransUnion FICO scores. After all, a score that's based on a 10-year-old scoring model isn't exactly helpful for my readers. Worse, the score, which myFICO sells to the public for $15.95 a pop, isn't relevant when you consider that most lenders aren't even working from that model any longer.
Perhaps the TransUnion FICO score that's sold to the consumer should come with a warning label: "This score may vary widely from the score that lenders use. As such, this score should be used for educational purposes only." I'm certain that consumers won't see that message anywhere on TransUnion's or myFICO's site but they're getting it here.
Until further notice, of course.
During the Credit Crunch, Work That FICO Score