For whatever reason, I missed this story by Bankrate.com in 2008. A reader of mine (Julian) sent me a story yesterday that ultimately led me to this one. We all know what classic FICO is -- and most of us know what the Bankcard Industry Option FICO (link here) score is -- but do we know what a "usage" score is? How about your bankruptcy score? Acquisition score? Application score? If these seem foreign, you have some reading to do.
From Bankrate.com:They have been using -- not only information outside of the credit report -- but they've been using scores outside of the widely known and recognized FICO risk score for many, many years. I don't know that I would say they've been doing it surreptitiously or in a sneaky manner; it's just no one's bothered to shed any light on it, and it's not something that they would typically disclose to a consumer. Quite frankly, if the media isn't talking about it, then really nobody knows about it.
He's right. Which is why I figure a good number of my readers haven't heard of some of the scores that are talked about in the article.
Read the entire story here (link). Hat tip, Julian.
Friday, January 2, 2009
Uncovering Hidden Credit Scores
Subscribe to:
Post Comments (Atom)
BY EMAIL 
RSS 
15 comments:
Just FYI. This is one of the most enlightening articles I have pointed to in the past six months.
I learned several things from it. I am not learning a lot of new credit things these days. Thus, I'd say this article was excellent.
Very good article. One thing I noticed was it mentioned that consumers cannot get their bank-card FICO anywhere. The author obviously doesn't have a WaMu account.
Clutch, I noticed that, too. Was thinking the same thing. Wamu -- for now -- offers the Bankcard Industry Option FICO score.
Notice that the person interviewed said that a lot of card issuers use that industry option score.
SECRET SCORES - WHAT ABOUT SECRET REPORTS!
I received a paper copy of my transunion report the other day - after getting several things fixed. It included several entries that are NOT included on the electronic transunion report. What I'm wondering is, if the credit bureaus list more information that we can't see - does it include things like credit scores that are secret?
Anon, great question.
Here's the deal: when it comes to credit reports, the paper copy is the one that counts. As you learned, the electronic copy didn't have everything that the paper copy had. That's why people always say to get a paper copy. It will be complete. Always assume that a credit card issuers -- or other creditors -- are accessing a complete report.
As for secret scores, this article pretty much showed that creditors are using scores that we are not privy to. Creditors only need to order up one of these scoring systems off the "shelf."
Also, credit reports and credit scores are separate. One houses data (the report). The other is generated based on data. So, depending on the model, a different score could be generated based on the same data. Indeed, see a bankcard industry option FICO score and a classic FICO score. The score is assessed using the same credit-report data but the scores will likely be different.
Also, I didn't mention this, but should have. There is also something called a "full factual" credit report. It lists, I believe, things that are not only on the report today, but stuff that has aged off as well.
Talk about being unfriendly.
And here is the part of the Fair Credit Reporting Act that allows for full factuals:
605. Requirements relating to information contained in consumer reports [15 U.S.C. 1681c]
(b) Exempted cases. The provisions of paragraphs (1) through (5) of subsection (a) of this section are not applicable in the case of any consumer credit report to be used in
connection with
(1) a credit transaction involving, or which may reasonably be expected to involve, a
principal amount of $150,000 or more;
(2) the underwriting of life insurance involving, or which may reasonably be expected to involve, a face amount of $150,000 or more; or
(3) the employment of any individual at an annual salary which equals, or which may
reasonably be expected to equal $75,000, or more.
--
It's my understanding that a full factual is rare. You could see one pulled for a large mortgage or a hefty insurance policy. You could also see one get pulled when annual salary is expected to be $75,000 or more.
http://www.fairisaac.com/ficx/Products/scoring/index.html
lists a number of products available: PreScores, Credit Capacity, Revenue, Bankruptcy, etc.
Jake
Consumer Reports had an article regarding credit scores last year (2008), but I don't remember what month it was. In essence, they were telling consumers that there is a lot of places creditors are getting their scores from so don't think myFico.com is the only place prospective creditors are looking when they evaluate your score for an approval.
I am still looking for that article among my volumes of credit card papers LOL that I keep for hands on proof! Now where is that article.....
CiifIcare
Oh btw CreditMatters....thanks for sharing this information! I read through the whole six pages and learned a whole lot!
This is really an ideal site! I just love it! CiifIcare
Ciif, thanks for the note. Very much enjoying your comments.
Glad that you've decided to stick around.
Let's have some fun in 2009.
Very interesting article. It shows that we are sliced, diced, chopped, minced and rendered for any and all useful parts--just like an animal led to slaughter. I find I don't enjoy the similarity much--but in our creditors eyes who are we to complain?
Anon, good insight. I think you're right. That's exactly how it's done. I feel like we're being put through a shredder.
wow...CM and Julian...Thank you for this article. This is a very insightful read! Much appreciated.
Julie, glad that you enjoyed the story. Wish that I would have posted that story when it was originally published. But that's ok. The information got to where it was supposed to get (in good time).
Post a Comment