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Presidents Day, 2011 - Financial Literacy and Education Commission (FLEC)
What the federal government tells you about credit scores - A report starting 2/21/11
In 2003, we amended the federal Fair Credit Reporting Act and decided that we need the Financial Literacy and Education Commission. Through its website, MyMoney.gov, the commission dispenses education to improve financial literacy. A hodge-podge of 22 federal entities are involved. The chairperson in charge of the cat-herding is the Secretary of the Treasury.
The duties of the commission include emphasizing, through curricula for all Americans, the significance of credit scores. The Comptroller General was tasked with submitting to Congress a report on the effectiveness of the commission, including the "extent to which consumers know and understand the factors that positively or negatively impact credit scores."
On its page "Managing Debt and Credit," the commission links to items on the websites of agencies that are part of the commssion. They're from the government and they're here to help you.
The first link is to the Federal Deposit Insurance Corporation who claims, "But credit scores also can be used for other purposes, such as when you apply for a job, rent an apartment or obtain insurance."
That exists despite clear statements by the credit bureaus that they do not provide credit scores to employers.
The second link leads to the U.S. General Services Organization's "Consumer Action Website" provided by the Federal Citizen Information Center (Pueblo, Colorado, 81009). The first paragraph of the landing page contains links to two commercial ventures. consumeraction.gov also states, "A credit report contains information on where you work and live, how you pay your bills, and whether you've been sued, arrested, or filed for bankruptcy."
However, Equifax contends, "A credit report does not include information about your checking or savings accounts, bankruptcies that are more than 10 years old, charged-off or debts placed for collection that are more than seven years old, gender, ethnicity, religion, political affiliation, medical history, or criminal records."
And, Experian states, "Your Experian credit report does not contain — and Experian does not collect — data about race, religious preference, medical history, personal lifestyle, political preference, friends, criminal record or any other information unrelated to credit."
The third link is to the Office of the Comptroller of the Currency which operates HelpWithMyBank.gov. The FAQ states that a credit score "is a number, roughly between 300 and 800, that measures an individual's creditworthiness... The most well-known type of credit score is the FICO score."
Fair Isaac and some of the credit bureaus state that, allegedly, the FICO credit score scale is 300 to 850 (not 800). And the wannabe, VantageScore, has a scale that ranges from 501 all the way to 990. On the same note, regarding credit score scales (popularly termed "range"), link four is to the National Credit Union Administration who, in contrast to the OCC, claims that the scale is "about 350 to 850." It is an amusing old story.
Number 11 is from the Office of Thrift Supervision. The agency says
Companies like: (1) banks, (2) potential employers, (3) insurance companies, and (4) companies that are considering whether to rent you a house or an apartment, all consider your credit to decide whether to do business with you. Companies like these review your “credit score” which is a measure of your financial trustworthiness.
Links 5 through 9: The Federal Reserve. The Fed has some explaining to do. Fed up yet?
If you think that all of the above might prove that there are too many cooks in the kitchen, here's one more: The new Consumer Financial Protection Bureau is in the process of establishing yet another institution: an Office of Financial Education.
Happy Presidents Day.