PART ONE
The Credit
Scoring Site

A bleak account
PART TWO
creditaccuracy.com
Dirty Data
Google
Web     creditscoring.com     creditaccuracy.com


PART TWO
creditaccuracy.com
Dirty Data

creditscoring.com
in the media

HowStuffWorks
Clark Howard
Federal Reserve
Chicago Tribune
Christian Science Monitor
Columbus Dispatch
Augusta Chronicle
Bankrate.com
Bankrate.com
Realty Times
Realty Times
Newsweek
Nolo
Nolo: Credit Repair
About.com
MoneyCentral Radio
The Detroit News, July 17, 2000
Money Maze Radio
USA Today Hot Site, 9/17/98

Updates
Blow by blow, from day one

Index | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998

10/16/05

  • The politics of personal self-destruction: Another garish new use for scores from The Toledo Blade
    • 10/15/05, Vanessa Winans (with contribution by Joshua Boak): "More candidates submit credit scores" - "Ms. Shultz ran her credit check yesterday and invited a reporter to her home to view the report, but when the reporter arrived, she released only her credit score, a 716, which is considered very good."

      Actually, that's below the average (median)(723)). The day before, the Blade reported, “'Anything above 720, that’s a very good score,' said John E. Brown, a Toledo financial adviser with Ameriprise Financial."

    • 10/14/05, "Toledo candidates OK credit checks Ford, Finkbeiner are rated excellent; others score lower"

      'You’re out of your mind!' he said. 'You’re bottom feeders. That’s all you’re doing.'” candidate Terry Shankland

    • 10/14/05, candidate's blog: "I had privacy issues to think through, and emotions to get in check about disclosing personal financial information to the world."
    • 10/13/05, Mike Wilkinson and Vanessa Winans, Blade staff writers: "Big tax bills unpaid for 3 hopefuls - Reaction to background, credit checks is mixed" - “'I’d like to see drug tests of the candidates,' Mr. Shankland said. 'I will give you a follicle. I will pee in a bottle.'”
    • Blade editorial: "The year of acting badly" - "If, as we suspect, there was collusion among the candidates to present a united front against The Blade’s request, and if, as we’re told, Councilman Frank Szollosi helped rally the resistance, we hope the voters of Toledo share our anger."
    • The Blade's other big story
    • Distribution:
      423 - 566 - 631 - 699 - 716 - 743 - 755 - 781 - 787 - 808

      National distribution
  • The Bar
  • Katrina
    • "'You're going to have a whole city with a FICO score (Fair Isaac credit score, on which most lending is based) less than 500,' Karger said."
    • on creditaccuracy.com: "Victims should consider adding a 'hurricane victim' statement to their credit file." - CDIA
  • New bankruptcy law
    • NPR newscaster, lawyer, and author, "Surviving Personal Bankruptcy": "And another problem with going to a credit counseling place is that, as soon as you sign up for that, your credit score plummets."
    • Fair Isaac: "What is Not In Your Score" - "Whether or not you are participating in a credit counseling of any kind."
10/14/05
  • Fair Isaac & The Columnists
    • We're touched. Bruce Mohl, The Boston Globe: "Know the score: Are you creditworthy? Finding out your rating and taking steps to improve it can pay off"
      "'It really does touch your life every day,' said Tom Quinn, vice president of global scoring solutions for Fair Isaac Corp., the Minneapolis company that developed the grade-point average of creditworthiness. 'In today's economy, your credit rating drives so much of your ability to survive.'"
      (alt)
    • Jim Stingl, Milwaukee Journal Sentinel: He [a guy at Fair Isaac] said the surprising number of people who rarely use their credit cards and then quickly pay the bill are 'hogging all the good scores.'"
  • An announcement! TransUnion ("a leading global information solutions company"): "TransUnion Announces Consumer Credit Scores [Fake-Os, not FICOs] Are Rising; U.S. Consumer Credit Risk Improving" (also, see FICO change)
10/11/05
  • Katrina, AW
    • MSNBC, Bob Sullivan: "Next storm for Katrina victims: Bad credit score, Proposal for pre-Hurricane rating spiked by credit bureaus" - "A late payment entry will appear with the designation 'AW' on consumers' credit reports..."
    • Consumers Union, et al
      • 9/12/05 - to Fair Isaac:
        Re: Request to develop a “Disaster Information Shield” on FICO credit score cards to protect persons affected by Hurricane Katrina and future disasters

        Dear Mr. Grundnowski [Fair Isaac],...

      • 9/21/05 to Equifax CEO: "Re: Request to Equifax to generate and post a 'pre-Hurricane' FICO score on victims of Hurricane Katrina"
        • "Equifax Names Richard F. Smith CEO and Chairman-Elect" - Resume shows no experience in credit reporting industry
        • Atlanta Business Chronicle, 10/4/05: "Equifax Inc.'s employment contract with Chairman-elect and CEO Richard F. Smith will have a negative impact on its third- and fourth-quarter earnings, the company reported in a Securities and Exchange filing."
      • 10/6/05 - "Credit Reporting Agencies Reject an Important Step to Help Hurricane Survivors: Many Katrina Victims Will Face Additional Economic Difficulties as Credit Scores Drop Due to Disaster"
    • CDIA: "Reporting Accounts for Hurricane Katrina Evacuees" - "Special Comment AW (affected by natural or declared disaster)"
    • Jeanne Sahadi, CNN/Money: "'Payment due' approaches for evacuees - As lenders' relief measures begin to phase out, evacuees in need will have to negotiate."
    • recently on creditaccuracy.com: "Equifax Offers Individuals Impacted by Hurricanes Access to Their Credit Files at No Charge" (10/10/05)
  • Higher score: Why bother?
    • Fair Isaac, 10/8/05:
    • A different story in "Testimony By Anthony M. Yezer, Professor of Economics, George Washington University"
      It may be that the subprime market is perceived to have problems because it is pricing credit risk efficiently while there is price discrimination in the prime market where applicants with FICO scores of 740 pay the same price as those with FICO scores of 640. This apparent price discrimination against low risk applicants in the prime market indicates a potential problem; it is not a sign of efficiency.
  • Free reports and FICOs and Fake-Os on annualcreditreport.com
    • Humberto Cruz: "You may purchase for $6.95, as I did, your Equifax FICO score, the one most lenders use." (TransUnion? Experian?)
    • The official baloney on the official web site: "You can also purchase a credit score when you request your free annual credit report through this website." Just "a" credit score. Not the FICO in two out of three cases. You have to spend more money to get the FICO. Remember them in 1999, harumphing "Well, again, what scores?"?
    • "For example, only Equifax will sell FICO scores – the scores used by most mortgage lenders to evaluate your application for a loan. The cost will be $6.95 per FICO score. TransUnion and Experian will sell their own non-FICO scores for around $4 each."
9/25/05
  • Home Mortgage Disclosure Act (HMDA)
    • Federal Reserve Board: "FREQUENTLY ASKED QUESTIONS ABOUT THE NEW HMDA DATA"
      HMDA data include some potentially relevant determinants of price, such as lien status, but exclude many other potential determinants, such as borrower credit history, borrower debt-to-income ratio, and the ratio of the loan amount to the value of the property securing the loan (loan-to-value ratio). Therefore, price disparities by race, ethnicity, or sex disclosed in HMDA data will not alone prove unlawful discrimination.
    • Washington Post, Sandra Fleishman, 9/14: "Minorities Often Pay More for Mortgages, Lenders Required To Give Fed Data On Subprime Loans" - "'Our analysis strongly indicates that the raw data alone can lead to inaccurate conclusions, which in turn may be unfair to particular institutions and may lead to unnecessary restrictions on the availability of loans to less-creditworthy applicants,' the Fed report said."
    • LA Times, Jonathan Peterson, 9/14: "U.S. Data Reveal Loan Rate Disparity, Blacks and Hispanics are far more likely than whites to get high-cost mortgages, a study finds." - "The data that were used in the study "do not include certain determinants of credit risk that some lenders consider in pricing mortgage loan products, such as the borrower's credit history … and consumer debt-to-income ratio," said the Federal Financial Institutions Examination Council, which compiles data for the Fed and other government agencies."
    • Baltimore Sun, Laura Smitherman, 9/14: "Blacks more likely to get higher mortgage rates, Fed says, Regulators take a look at role of race in market; More investigation suggested"
      Banking officials point out that the data don't include information about an applicant's credit risk or score, which plays a big role in determining pricing. However, the industry and regulators say that expanding the data fields that are released publicly could raise privacy issues or reveal proprietary business strategies.
    • Charlotte Observer, Binyamin Appelbaum and Rick Rothacker, 8/31: "Lawmakers want loan data" - "Federal regulators should gather more data, including credit scores, to assess why blacks are more likely than whites to get high interest rates on home purchase loans, several members of the House Committee on Financial Services said this week."
    • Rep. Brad Miller, D-N.C.: "I don't need to see more data to tell me that African Americans are not treated the same in lending."
    • Federal Reserve Bulletin, Summer, 2005: "New Information Reported under HMDA and Its Application in Fair Lending Enforcement"
      At the same time, we emphasize that, although these data present valuable new opportunities for researchers and others to learn more about the home-loan market and for the regulatory agencies to improve the enforcement of fair lending laws, the data are not sufficient by themselves for drawing conclusions about the fairness of the lending process or the activities of any individual lender. For example, credit history scores and other factors not included in the HMDA data can be critical in determining loan prices.
    • Jeff Brown, Philadelphia Inquirer columnist: "After all, the borrowers in each group had about the same incomes - so their creditworthiness ought to be about the same."
    • Center for Responsible Lending
      • "Comment on Federal Reserve Analysis of Home Mortgage Disclosure Act Data"
      • "Minority Families Pay More - HMDA Stats Show Disturbing Disparities"
        Lenders claim that weaker credit records explain the disparities, but the industry opposed collecting any information in the HMDA data that would shed light on borrowers’ creditworthiness. Only lenders have access to the information that would prove their point – and they’re not sharing it.
    • (Regarding the Texas Department of Insurance study) R.J. Lehmann, associate editor (BestWire), January 05, 2005:
      Using supplemental demographic data from the Texas Department of Public Safety, the researchers found that, as a whole, blacks had average credit scores that were 10% to 35% worse than the average scores for whites, while Hispanics had average scores that were 5% to 25% worse than those for whites. The average credit scores for Asian-Americans were about the same or slightly worse than those for whites, the researchers found.
    • "Hitting the Wall: Credit as an Impediment to Homeownership," Raphael W. Bostic, Paul S. Calem, and Susan M. Wachter, BABC 04-5, February 2004 - "This paper was produced for Building Assets, Building Credit: A Symposium on Improving Financial Services in Low-Income Communities, held at Harvard University on November 18-19, 2003."
      Perhaps surprisingly, even in higher income quintiles for both owners and renters, blacks and Hispanics exhibit worse credit quality, suggesting that cultural and perhaps other factors play a role in how minorities interact with credit markets. Though beyond the scope of the current study, this issue merits additional attention by researchers.
    • USA Today, 12/7/04: "The American Financial Services Association (AFSA), which represents lenders, including subprime mortgage firms, in May asked the Fed to add a disclaimer to the data indicating it does not include factors integral to loan pricing."
    • Race and credit, a history: 1999
      • NAR, regarding the Freddie Mac study: "However, the preliminary data suggests that African-American and Hispanic borrowers, are more likely to have 'bad' credit histories more often than white borrowers."
      • "Congresswoman Waters Blasts Freddie Mac Report for its Suspicious Timing and Questionable Assumptions on the Credit Records of African Americans and Hispanics Freddie Mac Report called 'Incomplete, Dishonest, and Racist'"
      • Fair Isaac: "Minorities and low-income borrowers present a slightly larger risk."
    • Secret study
      • Steve Bousquet, St. Petersburg Times, 10/04: "Martinez defends decision on bias study - When U.S. Senate hopeful Mel Martinez was HUD secretary, he blocked release of a discrimination study now wanted for a federal lawsuit."
        As he runs for the U.S. Senate, Mel Martinez promotes his record as a former housing secretary who helped many Hispanics and African-Americans realize the American dream of home ownership.

        But before he resigned from HUD last year, Martinez blocked release of a study of whether the nation's two biggest mortgage lenders discriminated against minorities.

      • Salon.com, Mary Jacoby, 10/8/04: "Karl Rove's Florida Frankenstein - Did Team Bush turn once-moderate GOP Senate candidate Mel Martinez into a gay-bashing, reactionary ogre?"
        The still secret, taxpayer-funded study focuses on whether credit-scoring systems used by the quasi-governmental Fannie Mae and Freddie Mac have resulted in lower credit ratings -- and higher hurdles -- for minorities trying to buy homes. One of Fannie Mae's lobbyists at the time Martinez squelched the report was former Florida Republican Party chairman Al Cardenas, a top Martinez supporter. Martinez told the Times that he had never talked to Cardenas about the study. The candidate said he shelved the report because it was "skewed and would have resulted in a real disruption of the marketplace."
    • Tannette Johnson-Elie, Milwaukee Journal Sentinel: "Bad credit may be a key factor in lending disparities", 2002
      "Credit issues are the main reason for this disparity," says Cohen, who works with New Opportunities for Home Ownership in Milwaukee, or NOHIM. "It's not just one or two things, like everyone thinks it is. It's one or two pages of collections. Why would you give that person a mortgage?"

      Not to say that all lenders are perfect. Nevertheless, African-Americans must shoulder a large part of the blame for the racial gap in mortgage lending, which is a seemingly intractable problem in Milwaukee, as pointed out in the ACORN report and in previous studies.

    • Abstract of "The Color of Money: Bad Credit, Wealth, and Race," Sheila D. Ards, Benedict College and Samuel L. Myers, Jr, University of Minnesota - "The authors find that there is no statistically significant difference in the average level of 'bad credit' among Blacks and Whites who have been turned down for loans or who have not applied for loans, as seen in national data sets measuring wealth and expenditures."
    • A tale of two zip codes: "Exhibit D - Demographic Data on Credit Scores, Race, and Income"
    • Whatever happened to Safiyyah Rahmaan's case against Fannie Mae?
      • Bill Maxwell, St. Petersburg Times, April 4, 2004: "Is Fannie Mae software biased against minority home buyers?"
      • Steve Bousquet, St. Petersburg Times, October 3, 2004: "Martinez defends decision on bias study"
        The lawsuit, filed in Washington by several firms, including James, Hoyer, Newcomer and Smiljanich of Tampa, says Fannie Mae "slams doors in the faces of minority home buyers and perpetuates the discrimination it is supposed to help cure."

        HUD denied the law firm's Freedom of Information Act request for the study in 2003, saying it was not finished. When it is done, HUD attorneys said, it is exempt from disclosure because it contains trade secrets and confidential financial information.

  • Consumer Federation of America: "CONSUMER UNDERSTANDING OF AND ACCESS TO CREDIT SCORES IMPROVES OVER PAST YEAR BUT STILL INSUFFICIENT, ANNUAL SURVEY FINDS" - "If consumers were to raise their credit scores by only 30 points, on average, they would save $16 billion on lower credit card finance charges alone." [includes audio]
  • Comedy Corner  arrow10.gif - 5.4 K   The Bar - What is a good credit score?

    • 660, Professor Staten, Georgetown:
      Banking regulatory agencies generally designate a subprime borrower as having one or more of the following credit history characteristics: two or more 30-day delinquencies in the past 12 months; one or more 60-day delinquencies in the last 24 months; a collection-related legal judgment, foreclosure, repossession, or account charge-off in the past 24 months; bankruptcy in the previous 5 years; a high default probability as measured by a Fair Isaac Co. (FICO) credit score of 660 or below; or a debt-service-to-income ratio of 50% or greater.
    • 640, "Credit to the Community," Daniel Immergluck: "A study using an industry survey of morgages priced as subprime found that 29 percent of subprime loans had credit scores above 640, generally considered the point at which prime lenders become quite comfortable with loans (Phillips-Patrick, Jones, and LaRocca 2000)."
  • New York Times, Damon Darlin: "Credit: For Those of You Keeping Score at Home" (8/27/05)
    • "Over the last four and a half years, it has sold more than 10 million scores to consumers at $45 each." (NOT TRUE. Fair Isaac: "Each FICO score and credit report costs $14.95.")
    • Caption with attached graphic: "an average score of 620..." (MEDIAN SCORE: 723. The same graphic shows a 620 falls within the lowest 27% of all scores.)
    • A statistic according to the Times: An 816 score is in the top three percent (13% have 800 to 850).
    • Another amazing revelation (or not) by the Times: "Here's the first rub: the credit score you get is not really the score that a lender will use... You can also obtain a credit score called Empirica from TransUnion, and one called Beacon from Equifax, that closely approximate the FICO score." YIKES.
      • Equifax: "Get your FICO® credit score, the score lenders use most to qualify you for credit." Further, the Score Power Insight pop-up box states, "For over a decade, Equifax and Fair Isaac have offered businesses the FICO® score, making it the score most used by lenders. In 2001, Equifax and Fair Isaac gave consumers access -- for the first time -- to their FICO® credit score with the launch of Score Power®."
      • Fair Isaac: "Available to consumers from both http://www.myfico.com and http://www.equifax.com , Score Watch helps consumers to proactively manage their FICO score -- the score most lenders use -- and identify the right time to make a major purchase."
    • "If you are checking your credit report three times a year as you should... " (It is unclear who told the Times that, but one strategy some have suggested is to get one report per year from each of the three major agencies, but stagger them every four months. If you checked all three three times a year, it would cost you $85.50 (not including scores).
  • Hampton Roads Daily Press: How to get the perfect score:
    [Fair Isaac's] Watts added that if anyone with perfect credit exists, they probably haven't led a very interesting life.

    "You would need to have managed credit for a long time, at least a couple of decades... And to never have missed a payment, within the timeframe on the credit report. You would need to be an occasional user of credit, but keep your balances low. And you had to have been very frugal in accepting new lines of credit."

  • The Columnists
    Nonetheless, simply seeking help from a nonprofit credit counseling agency doesn't 'ruin' your credit. A creditor may report that you are not paying your debt obligation as agreed. That information can contribute to lowering your credit score, which lenders use to help determine what price you pay for future credit.
  • What is a credit score?
8/14/05
  • Recently, the FICO score distribution changed, but the 723 median did not.
  • A Brit's veiw of Yanks: "One increasingly popular form of US one-upmanship is the credit score: a measure of a person’s financial behaviour, based on the type and size of his or her debts and how promptly they are repaid." (even though it is the score underdog, Experian gets the press because it releases more intriguing statistics to the public than does Fair Isaac)
  • Baltimore Sun: "A library fine recently posted on a report could trim 30 to 90 points off a credit score, he said."
  • A Catch-22, the mortgage banker's gambit: "The rapid re-scoring process is requested by your lender and generally takes three to five business days. The costs are not allowed to be passed along to the consumer."
  • Pay-off catch-22
    • Lew Sichelman: "Not only that, but if you pay off an old delinquency, it automatically becomes a more recent event and has a negative rather than positive effect than can drop your score more than 100 points in a heartbeat." (alt, alt)
    • Liz Pulliam, MSN Money:
      • "'If the trade line balance is showing zero, you’re not going to help your FICO score by paying off a collections account,' said Craig Watts, spokesman for Fair Isaac Corp., creators of the FICO credit scoring methodology."
      • "Such a payment can update a delinquency so that it looks more recent and takes a heavier toll on a credit score."
      • "Paying Old Debts Can Actually Hurt Your Credit Score," (heading on page 92 of Pulliam's book "Your Credit Score: How to Fix, Improve, and Protect the3-Digit Number that Shapes Your Financial Future")
    • Channel 7, Los Angeles: "Daniel Ray of Bankrate.com says, 'Paying the debt can in fact hurt your credit score. Some debts will reappear on your credit score making that appear as if it's a newly incurred debt.'" (alt)
  • West Virginia Attorney General: "You actually have to be a bit careful with this last one, because sometimes scores actually go down when bad items fall off your report. It's a quirk in the FICO credit-scoring software, and the potential effect of eliminating old negative items is difficult to predict in advance."
  • NBC "Today" financial editor and the editor-at-large for "Money Magazine," average FICO score: "First of all, 650 is not lousy. It's average."
8/8/05
  • Fun with Numbers
    • CNNfn, CNN/Money: "Most consumers score between a 300 and 850." (In the FICO model, all consumers score between 300 and 850, unless they don't have a score, at all.)
    • Consumer Federation of America
  • The Bar
    • Columnist enlightened - More on the GMAC survey
      • Before, 7/31/05: "What the lender seemed to find most troubling was that 62 percent of the consumers couldn't quote the minimum score needed to secure the most favorable mortgage rate. (It's 620 out of 850.) Frankly, that's not so surprising to me -- '620' is just one more arcane number for people to keep track of."
      • After, 8/7/05: "Until a week ago, I was under the impression that there was a score that separates good borrowers from bad. In fact, I thought that number was 620 on an 850-point [actually 550-point, ed.] scale, because a major mortgage lender had told me so."
    • The mortgage insurance factor (it isn't all just about the interest rate)
      Example: "Reduced Documentation rates," Fannie Mae standard coverage, 95 LTV, $150,000 loan, RMIC (Republic Mortgage Insurance Company)

      FICO 700+     $115.00/mo.
      FICO 660-699     $142.50/mo.
      Difference     $27.50/mo

    • Newsweek/MSNBC: "If yours is below 680, shop for a mortgage broker that works with a rescorer."
    • CNNfn, CNN/Money: "Credit scores in the range of 620-650 indicate basically good credit. A score above 680 will most likely qualify you for the best rate your lender has to offer."
    • Fannie Mae Foundation: "For example, 43 percent of minority applicaitons have FICO scores falling in the 580 to 679 range, arguably the area of close calls in underwriting. By contrast, 32 percent of nonminority applications fall between this range."
    • Palm Beach Post: "Generally, a score above 700 will yield credit at the most favorable interest rate."
    • Suze Orman, hip hop FICO Woman
      On suzeorman.com: "These days, just about anyone can get credit, but to qualify for the best loan rates, borrowers generally need scores above 690."

      On Oprah's site: "To get the lowest possible interest rate on your credit cards, you need to have a FICO score between 720 and 850."

      On Yahoo: "Typically any score above 720 is considered top-notch and will qualify you for the best deals." - "A Suze Orman exclusive" (includes table showing 760 as the best rate tier)

      On PBS: "So what do you do, everybody, to make sure that your FICO score is really high because the difference-- and just very quickly here-- on a $150,000 mortgage, 30-year fixed mortgage, you have a FICO score in the 500-range vs. A [sic] FICO score in the high 700-range, is $375 a month."

  • What does a credit score predict?
    • "Fair Isaac reports that about 10 percent of all households—whether or not they are mortgage borrowers—have scores under 580. They are expected to account for over 42 percent of all loan defaults (90-day plus delinquencies)." - Charles A. Capone, Jr., Ph.D Senior Analyst, Microeconomic and Financial Studies Division U.S. Congressional Budget Office Washington, DC, writing in "Research Into Mortgage Default and Affordable Housing: A Primer," for Washington Mutual, Inc. and the National Community Development Initiative.
    • Fair Isaac: "Like the Classic FICO credit risk score, the FICO Expansion score rank-orders consumers by the likelihood that they will become severely delinquent (90 days or more past-due on a credit account) in the 24 months following scoring."
    • "The score predicts the likelihood of 90+ day delinquency over the next 24 months."
    • Center for Statistical Research: "Technically, the FICO score predicts the probability that the borrower will experience over the next 2 years a serious delinquency (60+days), chargeoff, bankruptcy, tax lien or judgment lien."
    • Equifax: "Designed to identify creditworthy consumers and assess an individual's overall credit risk, Equifax BEACON predicts the likelihood that a new or existing account will become delinquent within 24 months after scoring."
    • CSC: "Beacon 5.0, co-developed with Fair Isaac, predicts the likelihood that an existing account or potential credit customer will become a serious credit risk within 24 months from scoring. Beacon identifies and predicts the full range of credit risks, including bankruptcies, charge-offs, repossessions, loan defaults, and severe delinquencies (90 days or more.)"
8/4/05
  • fico.org
  • Fun with Numbers
    • UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF CALIFORNIA: "The top FICO score is 800."
    • Wall Street Journal: "FICO scores range from 300 to 800."

      (Fair Isaac: "850")

  • The Bar (What is a good credit score?) - Essence: “A score of 700 or above is considered healthy,” says Ryan Sjoblad, public-relations exec at Fair Isaac."
  • Freddie Mac Annual Report, "Characteristics of Single-Family Mortgage Loan Portfolio" - "The distribution of the single-family loans underlying our Total mortgage portfolio... ":

    Credit Score 2004 2003 2002
    740 and above 44% 44% 39%
    700 to 739 23 23 23
    660 to 699 18 17 18
    620 to 659 9 9 10
    Less than 620 4 4 4
    Not Available 2 3 6
    Total 100% 100% 100%
    Weighted average credit score 723 723 718

  • Balance-to-limit ratio
    • 25% - Michelle Singletary, Washington Post:
      However, your overall utilization for all four cards is just 25 percent, which is good and would probably help your score. An even lower utilization rate would help your score even more. Generally, you don't want to use more than 50 percent of the available balance on any one card, and you don't want the combined utilization to be more than 50 percent. (alt)
    • 30% - Liz Pulliam-Weston, LA Times: "Getting your balances below 30% of the credit limit on each card can really help."
    • 33% - Evan Hendricks, author of "Credit Scores & Credit Reports": "If you use less than 1/3rd or 50% of balance, then that is good for your credit score."
    • Suze Orman, hip-hop FICO Woman: "The FICO brain trust says there is no specific number that qualifies as a 'good' ratio, just that lower is always better."

      (SOUND OF CREDIT CARD INDUSTRY FALLING OUT OF ITS CHAIR)

    More below (3/27/05)

  • In Canada
    • Ellen Roseman, Toronto Star: "This bolsters my argument that credit bureau scoring systems need to be more closely monitored. The Financial Consumer Agency of Canada plans to put out a publication later this month."
    • Michael Kane, Vancouver Sun: "730: This is Money columnist Michael Kane's credit rating. Here's what it means to him and you" - "Equifax and TransUnion use a scale from 300 to 900 with higher scores indicating less risk for the lender." (U.S. range: 300-850)
  • Credit score affects down payment, too (not just rate)
    • Los Gatos Weekly-Times quoting a mortgage lender in San Jose: "'Higher scores often allow a borrower to purchase with nothing down, whereas a low score may require more funds as down payment to reduce the lender's risk.'"
    • Mortgage Professor: "Credit score may affect house-purchasing capacity by affecting the interest rate, the required down payment, or both."
    • Wall Street Journal: "Mr. Cheever's original credit score of 674 is healthy by many lenders' standards, but he'd sought to improve it so he could qualify for a mortgage that wouldn't require a large cash down payment."
    • Chicago Tribune: "In terms of credit scores, anything above a 620 (FICO credit score) would normally qualify you for a mortgage with five-percent down. For a zero-down loan, he says you`ll have to break 700 as a credit score."
    • Chinloy and McDonald, American University: Abstract: "Low-credit applicants otherwise denied funding are able to qualify by paying higher interest rates in exchange for offering more equity or lower loan-to-value ratios. This prediction is consistent with the subprime applicants financing or refinancing their mortgages at relatively low loan-to-value ratios."
    • (related) Pennington-Cross, Office of Federal Housing Enterprise and Oversight - Abstract: "Tests also reveal that default rates are less responsive to homeowner equity when credit scores are included in the specification."
    • It's the loan-to value ratio, stupid.
    • [link added 8/8/05] A rate sheet showing cutoffs for LTVs/FICO scores
  • Newsflash! More people have an 800! Now, 13% of the population has "800+"
    • (the left hand) The new distribution: 13%
    • (the right hand) The old distibution: 11% (they'll probably change this in a few days, so: alt, alt, alt, alt, alt links)
7/28/05
  • The Bar: NEW - "What is a good credit score?"
    • CNN/Money, Sarah Max, CNN/Money senior writer: "8 credit score myths" - Includes 3/15/05 myFICO.com chart showing top rate tier starts at 720
    • Bankrate.com: ("Posted: March 1, 2005") - "A score of 720 or higher will get you the most favorable interest rates on a mortgage, according to data from Fair Isaac Corp., a California-based company that developed the credit score."
    • myFICO.com chart today showing top rate tier starts at 760
  • What a bunch of Yahoo!s. "Copyright © 2005 Experian."
    • The number one result of the search 'What is a good credit score?' (no quotes): http://loan.yahoo.com/c/basics7.html.
    • "Credit scores range from 375 to 900 points... " Bzzzt. Correct answer: 300-850.
    • Yahoo Finance says, "Scores between 620 and 650 (average FICO scores fall into this range)... " Uh, sorta, kinda. The median Classic FICO score is 723, and a chart from the wizard shows the middle 40% of the distribution falls above 650.
    • Question sent in by creditscoring.com from the Yahoo Financial News help page 7/22/05: "Who wrote http://loan.yahoo.com/c/basics7.html? What is the source of the statement, 'Credit scores range from 375 to 900 points'?" Will continue to follow this story of misinformation.
  • More Fun with Numbers:
    • U.S. Department of the Treasury: "The acronym FICO comes from the name of the company that developed the leading credit scoring model – Fair Isaac Company of San Rafael, California. FICO scores range from 350 to 850, with higher scores indicating better past credit performance."
    • U.S. Department of Agriculture: "FICO scores generally range between 300 and 900."
    • LA Times: "The scores range from a low of about 300 to a high of 900."
    • Clark Howard: "The score was created by the company, Fair Isaac, and it is based on the likelihood that you will pay your bills. The score of 720 or above means you’re in great shape credit wise. The average score in the country is 678." Fair Isaac: "The Median FICO Score in the U.S. is 723."
    • Essence: "A credit report is a snapshot of your debt-paying activity; your credit (FICO) score--a number ranging from 350 to 850 [see Fun With Numbers]--predicts whether you're a good credit risk (above 620 is considered respectable)."
    • About.com: "Credit scores (usually) range from 340 to 820."
    • Fair Isaac: "FICO scores range from about 300 to 850." "About"?
  • Washington Post: "The credit-scoring algorithm looks at the credit-utilization rate for each active account and, separately, a person's credit usage for several accounts together, said Craig Watts, public-affairs manager for Fair Isaac, the company that created the FICO credit score used by many lenders to evaluate consumer credit risk."
7/19/05
  • Consumer Reports, August, 2005 cover story: "Your credit score - What you don't know can really hurt you"
  • Opinion Research survey
    • MarketWatch: "But consumers with scores from 620 to 639 will pay $154 more a month for the life of their loan, with a monthly payment of $986, because the best rate they can get is 6.88%, according to MyFico.com." (alt)
    • AccountingWEB.com: "He was commenting on a recent survey conducted by Caravan Opinion Research Corp., for GMAC Mortgage which indicated only 7 percent of respondents knew a credit score of 800 or better gets the best rate... "
    • Somebody call CNN/Money, please: "Debunking credit-score myths" - "According to a recent survey conducted by GMAC Mortgage, 62 percent of consumers do not realize that a score of 620 or better means you can become eligible for getting the best possible mortgage rate." Calls it the "magic number of 620."
    • The poll taker
    • The sponsor's press release page: No mention of the survey
  • Getting the best rate on funeral services. Experian Plus (not FICO (italicized and boldfaced so you don't get the wrong idea)) score statistics:
    • U.S. News and World Report: Your score is bound to be the best-- eventually. National averages:
      AGE
      18-29: 637
      20-39: 654
      40-49: 675
      50-59: 697
      60-69: 722
      70+  : 747
    • Experian
  • Action News, Atlanta: "Clark Howard Talks Credit Scores - Consumers, Lenders May See Different Figures" (video)
  • "Allstate to repay $30 million to California customers" - "According to both the Department of Insurance and Allstate, the complaint alleged that Allstate had used a form of credit scoring as a criterion when underwriting property insurance, resulting in higher premiums for some customers."
  • Balance-to-limit ratio
    • Washington Post nationally syndicated columnist: "Financial Fact: Having a lot of available (unused) credit is not taken into consideration in the scoring models produced by Fair Isaac Corp., which created the FICO credit score model used by many lenders. Available credit by itself is not considered by the FICO score because it is not nearly as predictive of future repayment risk as how you have managed your actual debt." (alt, alt)
    • FICO: "What’s In Your Score" - "Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)"
  • (UK perspective) The Guardian: "Credit scores mark us all as losers"
  • More Fun with Numbers. The legend refuses to die.
    • Fair Isaac: "300-850" (Median: "723")
    • Harvard: "400 to 900"
    • U of M: "400 to 900 with the average around 700" (FICO's HQ is in the same town)
    • More from the Gopher state: "300 to 900"
    • State of Ohio: "400 to 900"
    • Federal Reserve:
      My files contain the statements of four different experts who describe the range of scores in the basic Fair Isaac (FICO) model as 300 to 900, 400 to 900, 336 to 843, and 395 to 848. If product offerings are such that the “experts” can’t agree on basic information, how can consumers be expected to gain a meaningful understanding of the scoring process and its impact?
    • "FICO anota la gama a partir del 400 a 900. Cerca de 700 se considera medios. El fórmula exacto usado es un secreto de FICO."
    • C.E.T.C. Unlimited Inc. Texas Real Estate School: Quiz #4 - "A) FICO 'bureau scores' 400-900"
    • Forbes Mortgage Library: "300s to about 900"
    • National columnist and author of "The Mortgage Encyclopedia," the Mortgage Professor: "350 to 850"
    • State Farm: "about 350 (not good) to 850 (excellent)"
6/13/05
  • The National Credit Reporting Association, Inc., rapid rescoring lawsuit: Litigation Updates (Updated 05/25/2005)
    • NCRA: "NCRA was informed this week that the United States Federal Court in the Central District of California, Judge David Carter, has issued a split ruling in the cases of Standfacts Credit Services Inc., et al., (case number SA CV 04-358) and the NCRA case (SA CV 04-1055). He has ordered both cases to proceed on antitrust counts against the three credit repositories under the Sherman Act Section I – Conspiracy to Restrain Trade, Robinson-Patman Act – Price Discrimination and the California Unfair Competition Law – Business & Professional Code §17200, while granting the motion to dismiss without prejudice (we retain the ability to amend the complaint within 30 days) other claims under the Sherman Act (our Count IV) and the Lanham Act (our Count VI) and portions of the California Unfair Competition Law (our Count V). Judge Carter also dismissed with prejudice our claims of Sherman Act Section II – Monopolization, Lanham Act Section 43 (a) and assorted other state law acts."
    • American Antitrust Institute: "Mortgage Credit Reporting Market Has Competitive Problems, AAI Tells Congress. AAI Research Fellow Jonathan Rubin's Report, Endorsed by CFA, Cites Price Squeeze by National Credit Repositories."
    • BankRate: "A rapid rescore on five erroneous items, for example, could cost about $450." (alt)
    • The Credit Scoring Site: Rapid (and expensive) rescoring
  • Scoring payday loans. Damned if you do, and...
    • Chicago Sun-Times: "Payday lenders start credit-building program" - "Traditional credit reporting agencies don't track or score payments on commonly recurring bills such as rents and utilities. They also don't track payday loan payments."
    • MSN Money describing Fair Isaac's "Expansion Score": "These lenders feed off folks who either don’t know how to manage their money or are so strapped they feel they have no other choice."
  • Insurance scoring, Pittsburgh Tribune-Review: "Erie will review each customer's credit score every year when a policy is renewed, and may trim the premium."
  • Comedy Corner  arrow10.gif - 5.4 K   Suze "Celebrity" Orman's conflict of interest
    • "'A FICO score is the most important part of your entire financial picture. It determines if a landlord will rent to you; employers are starting the check FICO scores before they hire you; you can't get a cell phone without a good FICO score.'" (5/5/08 update: Credit bureaus do not include scores in pre-employment screening reports.)
    • Suze, herself: "We are going to start our Debt Series off by focusing on the most important piece of your financial DNA: Your FICO score."
    • Suze (pronounced SUE-zee) hawking other stuff
      • "I have now become a celebrity."
      • "Et tu, Suze? (Part 2)" - "Three weeks ago, for whatever reason, I ended up taping the show. And wouldn't you just know it? Halfway through the episode, a female caller took center stage, asking Suze for advice. Here is the transcript of that little exchange... " (Part 1)
      • (Insert "FICO" for "GM") John Cook, Chicago Tribune: "Besides being inescapable, the ads, for which Orman was paid an undisclosed sum to endorse the carmaker's 0-percent interest rate offer, raised questions about how Orman could claim to give unvarnished advice to CNBC viewers while taking money from GM."
    • Not, exactly, independent advice. Suze Orman is a shrill Fair Isaac shill: "myFICO Announces 10 Million FICO Scores Purchased by Consumers" - "As an example, St. John cited Suze Orman's FICO® Kit, the industry's first collaboration with a celebrity financial expert to provide consumers with personalized information to help them understand what they can do to improve their credit standing and potential over time."
    • "Suze Orman FICO Kit" advertised on the suzeorman.com home page.
    • USA Today suckered for publicity; no mention that Suze's on the take: "Orman has arranged her colorful (crisp blues and greens) book around 10 major topics in her order of priority: FICO credit score, career, credit, student debt, saving, retirement, investing, buying a car, home purchase, and finally, love and money." No mention by USA Today that Suze just happens to sell FICO scores.

      And, it is so. Suze makes it official: Saving is only the fifth priority. Credit is more important.

      Christian Science Monitor: "Today, though, nearly 1 in 5 American households has zero net worth or actually owes more than it owns. And the odds of a son or daughter rising above their parents in such a financial predicament have shrunk."

      Pamela Gaynor, Pittsburgh Post-Gazette: "Nearly a decade later, with policymakers bemoaning the nation's meager personal savings rate, economic statistics suggesting a shrinking middle class and the White House promoting an 'ownership society,' IDAs and other asset-building programs for the poor are getting renewed attention."

      U.S. Senator Lieberman press release: "Lieberman Introduces Legislation to Help Americans Build Savings Accounts" - "'A home for your family, a business to call your own, and an education that will lead to a fulfilling career -- we call these things ‘The American Dream’ and its power runs deep in our national psyche,' Lieberman said."

      U.S. Senator Santorum press release: "The United States household savings rate lags far behind that of other industrial nations, constraining national economic growth and keeping many Americans from entering the economic mainstream by buying a house, obtaining an adequate education, or starting a business."

6/1/05
  • Free credit reports for southern states begins today
  • Kenneth Harney, rapid rescoring: "The court turned down a request by the three dominant credit bureaus -- Equifax, Experian and TransUnion -- to dismiss class-action suits charging them with anticompetitive and predatory pricing practices in violation of federal antitrust and state fair-trade laws." (alt, alt)
  • The Law of Averages
    • And now, ladies and gentlemen, the latest word from the wizard: "'I get letters from people who have scores in the 830s, and they're complaining,' Mr. [Ryan] Sjoblad said. 'It's like a millionaire arguing over a stick of gum. Once you're over 750 – really, 720 – you're going to be able to get the best rates.'"
      • It's official. You can get the best rates with a below average (median) score.
      • If your name is Sjoblad, you can be an expert, too.
    • New York Times, Eric Dash, 5/21/05 (reporting limits): "Up Against the Plastic Wall" - "There is no clear legal requirement to report the data; Capital One and Kay have said that the information is proprietary and providing it may encourage competitors to pick off their most profitable customers." Whoopsie: "With the average FICO score now about 705 on an 800-point scale... " (Fair Isaac: Median: 723; scale: "300-850" (a 550-point scale).
  • The Unscoreables
    • Rep. Castle press release: "Delaware Congressman Mike Castle presided over a House Financial Services Committee hearing on "Helping Consumers Obtain the Credit They Deserve," designed to look at ways in which consumers who currently have no or thin credit report files can build their credit history through the use of alternative data that is not currently reported to the credit reporting agencies."
    • Kenneth Harney, 5/21/05: "Not so fast, warned consumer advocates at the hearing... "In many parts of the country, she said, "current utility protections" for low-income customers actually "facilitate negative payment histories."
5/22/05
  • Rapid (and expensive) rescoring - How the credit reporting agencies inaccurate reports about you cost you either time or money (and how much)
    • How long the credit reporting agencies can wait to make a correction, by law. Deadlines in Fair Credit Reporting Act:
      • "... before the end of the 30-day period beginning on the date on which the agency receives the notice of the dispute from the consumer or reseller."
      • "... the 30-day period described in subparagraph (A) may be extended for not more than 15 additional days if the consumer reporting agency receives information from the consumer during that 30-day period that is relevant to the reinvestigation."
      • "Notwithstanding the time periods specified in section 611(a)(1), a reinvestigation under that section by a consumer reporting agency upon a request of a consumer that is made after receiving a consumer report under this subsection shall be completed not later than 45 days after the date on which the request is received."
    • We're saved! Rapid Rescoring is like a road runner, racing through the system at an astonishing(!), blazing(!)

      3 days.

      • Scripps Howard: "72 hours."
      • First American Credco: "The bureau processes the item within 48 hours from when it was received at the bureau, and the consumer’s credit file is updated."
      • Wait five days, and get 200.
      • And, using its famous hyper-efficient distribution and trucking system, Walmart: "72 hours."
    • Time is money
      • NY Times, 4/3/05: "Ms. Detweiler said that since it costs anywhere from $30 to $120 to correct an individual item on a single credit report, it could cost several hundred dollars to correct multiple items on more than one report."
      • CreditXpert: "There are no guarantees: the changes implemented may not improve your credit enough. In fact, the changes could actually worsen your credit."
      • Bankrate: "Generally, the service will run roughly $50 for every account on your credit report that needs to be addressed, but it could save you thousands on your loan."
      • MSN Money: "Credit Communications charges about $100 to correct one error at all three bureaus, Flynn said."
      • Working the system: "His mortgage broker, Nagy Henein, told him to pay down his cards. Then the broker used a new service called "rapid rescoring" to notify the credit bureaus of the chef's payments."
      • "Charges for the service may exceed $100 to $200 in some cases."
      • A price sheet: "$25.00 per item, per bureau, per borrower (For example: Expedited correction of one tradeline at all 3 bureaus on an Individual would be $75.00)"
So, at those prices, what is the credit reporting agencies' incentive to maintain accurate records?

Applying for a car loan? Insurance? You don't count-- there's no rapid system for that. Applying for a mortgage loan is a sacred act.

    • Congressional testimony: "All three repositories have began dipping into the internet for more sources of income by selling direct to the consumer reports, allowing certain CRA/resellers to sell direct to the consumer via the internet, re-scoring services themselves direct to the consumer, selling new scoring models direct to the consumer, charging and setting “high” pricing for resellers so they can re-score the reports they generated, and last but not least monitoring services."
    • Realty Times, 5/10/04:
      But the nationals increasingly are pricing their data in a "predatory" manner, according to the suits, charging the independents more on a wholesale basis for credit reports and FICO scores than the bureaus charge small mortgage bankers and brokers for the identical products on a retail basis. Yet those banks and brokers are the independent agencies' main customer base for mortgage credit reports and "rapid rescoring" services.
    • The lawyers: "The plaintiffs also allege that the three bureaus have drastucally [sic] raised prices for rapid rescoring, while simultaneously prohibiting local rescoring specialists from directly or indirectly passing on those costs to consumers seeking rescoring services."
    • Why do they call it "news" (if it is old(s))? Headlines as early as 11/00, and 8/01

  • Insurance Scoring (insurance page)
    • Come and get it
    • The Federal Trade Commission
      • "FTC Requests Comments to Aid "Credit & Insurance Score" Study (69 FR 34167; 06/18/04)"
      • TDI [Texas Dept. of Insurance] Credit Scoring Study
      • Public Comments: # 123 Fair and Accurate Credit Transactions Act of 2003: Methodology and Research Design for Conducting a Study of the Effects of Credit Scores and Credit-Based Insurance Scores on the Availability and Affordability of Financial Products
    • Washington State: "Questions and Answers on Credit Scoring and How Insurers Use Credit Information"
    • A random chart on the State of Michigan web site shows those with incomes of $40,000 to 49,000 have the lowest scores.
    • ChoicePoint: "A story in The Wall Street Journal on May 3 incorrectly reports that, in relation to the recent fraud incident, that data had been illegally downloaded on millions of people."
    • Cause/effect
      • SmartMoney.com: "Someone having financial problems could be under more stress, which could lead to more accidents, explains Clarence Smith of Conning's insurance-research division."
      • Pasadena Star-News commentary: The Montebello Democrat's brother, Tom Calderon, received fat campaign contributions from the insurance industry in his failed 2002 bid for state insurance commissioner... Ironically, those with more credit cards -- and therefore a larger possible debt load -- are scored higher than those with one card or none." (number of cards, 1997: see Letters)
      • the Patriot-News, Harrisburg, PA: "'I was furious,' said Matarango, who lives in Mechanicsburg. Erie Insurance Group had been providing her home and car insurance since 1964."
    • The Insurance Information Institute
      • "Actuarial studies show that how a person manages his or her financial affairs, which is what an insurance score indicates, is a good predictor of insurance claims." ("The mission of the Insurance Information Institute (I.I.I.) is to improve public understanding of insurance -- what it does and how it works.")
      • Credit FAQs
    • American Insurance Association
    • Insurance Scoring, The Retro Guide
    • Allstate
      • Explanations: "Why Does Allstate Use Credit Information to Evaluate Insurance Policies?"
      • "Professional" on the secret system needed. Any takers? "[Allstate's] Mellander recommends that a consumer who is asking questions about how much this or that is going to affect a credit score should "contact a professional or a financial adviser who can give them some honest, solid advice."
    • NATIONAL ASSOCIATION OF REALTORS, 8/16/04: "It is important for the FTC study to point the way towards the elimination of artificial barriers to homeownership presented by untested models and inaccurate data limiting the availability of property and liability insurance."
  • Inquiries (coda to 5/11/05 and updates)
    • The book
      • Amazon.com: "Stephen Snyder is the country's leading expert on how to improve credit scores by changing how you manage credit."
      • CS Monitor: Trained by Fair Isaac Corp., which calculates FICO scores, Mr. Snyder gives seminars and is publishing a book this month: "Do You Make These 38 Mistakes with Your Credit?" Here's some of his advice...
    • The press
    • The authority
      • "For many people, one additional credit inquiry (voluntary and initiated by an application for credit) may not affect their FICO score at all. For others, one additional inquiry would take less than 5 points off their FICO score."
      • "But according to Fair Isaac:... Each "hard" credit inquiry (meaning the consumer has applied for some form of credit, prompting the creditor to check his/her credit report or score) that is counted normally subtracts no more than five points from a person's score."
    • The questions (previously unpublished) about the book and the press
      To: stephen@afterbankruptcy.com
      From: creditscoring.com
      Subject: credit score, inquiries, 12 points
      Date: April 11, 2004
      cc: gmarksjarvis@pioneerpress.com, rjohnson@gfherald.com, maryann@afterbankruptcy.com

      Who told you that one inquiry can reduce a credit score by as much as 12 points? The readers of creditscoring.com would be interested in the source of that information.

      See http://www.twincities.com... and http://www.grandforks.com....

      Thanks.

      Subject: Re: credit score, inquiries, 12 points
      From: stephen snyder (stephen@afterbankruptcy.com)
      To: "creditscoring.com"

      That's not true for everyone.

      Who are you?

      stephen

      To: stephen snyder (stephen ...snip... psabatini@post-gazette.com)
      From: "creditscoring.com"
      Subject: Re: credit score, inquiries, 12 points
      Cc: rjohnson@gfherald.com

      My name is Greg Fisher; I write creditscoring.com and creditaccuracy.com, Parts I and II in a three-act play.

      A few newspaper writers seem to have the wrong idea, then. For whom is it true?

      See http://www.post-....

      Subject: Re: credit score, inquiries, 12 points From: stephen snyder To: "creditscoring.com"

      On 4/11/04 11:58 AM, "creditscoring.com" wrote:

      My name is Greg Fisher; I write creditscoring.com and creditaccuracy.com, Parts I and II in a three-act play.
      Where can I read more about you? I like knowing who I am talking to.

      A few newspaper writers seem to have the wrong idea, then. For whom is it true?

      See http://www.post-gazette.com...

      You should know. Reporters for the most part do a good job. I have yet to see an article on credit scoring that was 100% accurate. Only two articles that came close.

      Stephen


      Subject: To be fair...
      From: stephen snyder (stephen@stephensnyder.com)
      To: greg@creditscoring.com

      To be fair here is a bio on me:

      http://doyoumake...

      Stephen

      To: stephen snyder (stephen@afterbankruptcy.com)
      From: "creditscoring.com" (greg@creditscoring.com)
      Subject: Re: credit score, inquiries, 12 points
      Cc: gmarksjarvis@pioneerpress.com ...snip... psabatini@post-gazette.com

      I'm sorry, that's it about me: I write.

      But this isn't about me or you, it's about credit scores. They tend to be calculated the same even if I'm the man in the moon. I don't know for whom it is true, and that's why I'm asking. For whom, and what's your source? Just a name and phone number will do.

      Thanks.

      And, could you let these reporters know which parts of their respective articles are inaccurate-- at least the parts attributed to you?

      Subject: Re: credit score, inquiries, 12 points
      From: stephen snyder
      To: "creditscoring.com"

      On 4/11/04 10:45 PM, "creditscoring.com" wrote:

      But this isn't about me or you, it's about credit scores. They tend to be calculated the same even if I'm the man in the moon.
      With all due respect, dude, you are so wrong. There are 10 different ways scores are calculated. (translation: 10 different answers to the credit scoring question)

      But you knew that, right?

      Why should I take time to educate you?

      Stephen

      To: stephen snyder (stephen@stephensnyder.com)
      From: "creditscoring.com" (greg@creditscoring.com)
      Subject: Re: credit score, inquiries, 12 points

      With regard to any respect which may or may not be due me, you missed the point: That the scoring system doesn't change, and that the facts (or lack thereof) proclaimed in our discussion don't change based on who I am or who you are (doctor, lawyer, indian chief, "one of the leading experts on credit scoring" (http://www.doyou...). You said, "Where can I read more about you?" and "I like knowing who I am talking to," then showed me your "bio" as if I should reciprocate. Look up "ad hominem": http://dictionary.reference.com/search?q=ad%20hominem. You-- openly admitting bankruptcy yet dispensing financial advice-- should understand that principle.

      So, let's just stick to the facts. If you don't want to answer the question about for whom it is true (indeed, begged by you, alone), could you, please, just answer the original question: Who told you that one inquiry can reduce a credit score by as much as 12 points?

      Why should you educate me? Wrong question; I just want the source. It should be: Now that you haven't answered, should you continue to defend your veracity?

      Thanks again.

      Sincerely,
      Dude


      To: stephen snyder (stephen@stephensnyder.com)
      From: "creditscoring.com" (greg@creditscoring.com)
      Subject: Re: credit score, inquiries, 12 points

      According to Fair Isaac,

      "For many people, one additional credit inquiry (voluntary and initiated by an application for credit) may not affect their FICO score at all. For others, one additional inquiry would take less than 5 points off their FICO score."

      http://www.myfico.com/...

      Do you have a comment?

      Subject: Re: credit score, inquiries, 12 points
      From: stephen snyder
      To: "creditscoring.com"

      You are asking good questions greg.

      I am unable to provide you with the answers you need.

      Stephen

      To: stephen snyder
      From: "creditscoring.com"
      Subject: Re: credit score, inquiries, 12 points
      Cc: rjohnson@gfherald.com ...snip... psabatini@post-gazette.com

      How is it that you are unable to answer the original question: Who told you that one inquiry can reduce a credit score by as much as 12 points?

      Are you just unwilling? Or, will your source sue you?

    You can go along with the system, buck the system, or make a buck on the system.

  • Mailbag:
    Subject: Age discrimination & credit scores
    Date: Fri, 20 May 2005 14:45:41 EDT

    Greg - I was perusing your site to attempt to reconfirm something I believe I heard several years ago - a consumer's FICO score is likely to be higher than it would otherwise be simply if he or she is 60 years old (or older?)

    Have you any information to substantiate this? On your site, under "is age a factor, the link appears to be bad.

    Regards,

    Bill

    From: creditscoring.com
    Subject: Re: Age discrimination & credit scores
    Date: 5/20/05

    Yes, the site is littered with dead links, but that adds to the drama: Credit Scoring-Part One of a Three-Act Play. Remnants of The Dark Times, Before Credit Scores Became Available (Part Two is under way, is much more important, but is under-appreciated).

    I committed to showing everything from day one--no typical mass media-type editing. What's the point of that? This medium isn't limited by newspaper pages or television time, so, that's why the dead links are there. In some cases, creditscoring.com is the only readily available resource to quotes about scoring from the past seven years (albeit short quotes). Fortunately, many of the media stories still exist in public libraries archives. I haven't figured out how to link to them.

    Yet.

    The Equal Credit Opportunity Act states, "In an empirically derived, demonstrably and statistically sound, credit scoring system, a creditor may use an applicant's age as a predictive variable, provided that the age of an elderly applicant is not assigned a negative factor or value" (http://ecfr.gpoaccess.gov... ).

    And, the part to which you're referring states, "In an empirically derived, demonstrably and statistically sound, credit scoring system, a creditor may use an applicant's age as a predictive variable, provided that the age of an elderly applicant is not assigned a negative factor or value." Elderly means age 62 or older.

    However, the point is moot. Fair Isaac says, "Other types of scores may consider your age, but FICO scores don't" (http://www.myfico.com... ). I have no reason to not believe them. While the company is secretive, and has acted as the credit reporting agencies' apologist (see http://www.federalreserve.gov... ), they are credible.

5/11/05
  • The Inquiry Inquiry:
    • The wizard changes the rules of the rat study. Columnist: "The old 14-day rule might still apply because some lenders might not use the new version." (alt; alt; alt)
    • Fair Isaac quells the masses' fears
      • "For others, one additional inquiry would take less than 5 points off their FICO score."
      • "Typically, these are treated as a single inquiry and will have little impact on the credit score."
      • "What's in your score" - "Number of recent credit inquiries... Time since credit inquiry(s)"
    • You pay for 2 years - Bankrate: "FICO doesn't use inquiries over two years old in computing a credit score."
    • Experian: They only become significant if there are other issues, such as late payments or very high debt as compared to income you include on your credit application.
    • Mortgage Professor: "You will damage your credit if you spread your shopping over many months."
    • Some guy: 12 points
    • CNN/Money, "8 credit score myths" (down from 10 myths in 1999): "Take note: This grace period doesn't apply to credit cards."
    • "The most glaring issues facing Nevada residents were late payments and excessive credit inquiries, said Heather Greer, a spokeswoman for Experian."
    • What a Fool Believes: "Very few credit inquiries (no more than one to three in a six-month period)." (see Press)
    • Consumer Reports publisher
      • "Because these activities result in inquiries into the borrower's credit report and recent credit inquiries can produce a lower score, the consumer is unknowingly engaging in non-debt related activity which lowers the credit score... and the interest rate on his credit card was increased from 18% to 25.9%"
      • "Every time a dealer runs the consumer's credit, it may appear to be an inquiry for a personal loan, rather than a mortgage loan or an auto loan."
    • creditscoring.com, the numbers - The Point about One Point:
      Enter a 700-719 score and a $200,000 loan into Fair Isaac's Loan Savings Calculator ("Interest rates as of 5/10/2005"), and the result is: "If your score changes to 675-699, you could pay an extra $25,108"
  • The Battle over Insurance Scores
    • AP - Bellwether Michigan
      • "Insurance companies can continue using customers' credit scores to determine their home and automobile insurance rates under a decision issued Monday by a Barry County Circuit Court judge."
      • "The state has filed an appeal of a judge's ruling that allowed insurance companies to continue using customers' credit scores to determine their home and automobile insurance rates."
      • Commissioner: I will appeal this decision to the Michigan Court of Appeals, which I hope will recognize the legality and necessity of reducing base rates and eliminating insurance credit scoring.
    • California: "The state Assembly Insurance Committee on a 6-0 vote Wednesday approved Assemblyman Ron Calderon's legislation allowing insurance companies to use credit scores in determining whether to sell homeowners insurance."
    • Pennsylvania: "Mostly, she said, she was upset because she knew that the number of credit cards she had could influence how much she paid for car insurance."
  • Elliot Spitzer
    • AP: "The industry has argued that HMDA data can be misleading because it does ot take into account all the variables that a finencial institution uses to price a loan, including credit scores, the quality of the home, the size of the down payment or the debt-to-income ratio of buyers.
    • "Spitzer also asked about credit scores of applicants, "loan-to-value ratios," and any internal reviews by lenders into ethnic disparities of loan trends, said the source who spoke on the condition of anonymity."
  • Andrea Coombes, MarketWatch: "One late payment could push an 800 score down to 640." (alt)
  • Happy Birthday (corny)
    • Fair Isaac PR: "2001: Fair Isaac and Equifax jointly set the nation's standard for score disclosure products with their introduction of Score Power(R)." (alt)
    • creditscoring.com: "Fair, Isaac: Then and Now" (includes "1999: 'And in fact, I'm sorry to tell you this, but Fair, Isaac's job is not to tell you how to get a better score.'" (to the FICO PR department: the creditscoring.com domain is registered through 2011)
  • Pat Gauen, St. Louis Post-Dispatch: "You have a credit score number too. It tells potential lenders where you fall on the deadbeat scale. You can ask to see it, but for unfathomable reasons, the score they give you is not necessarily the score they gave the furniture store where you just financed a new sofa."
4/10/05
  • The median FICO score: Did the scale change, or is our credit getting worse?
    • Kiplinger: "The median FICO score is 725, says Craig Watts of Fair Isaac, the company that compiles the scores."
    • Frontline
      • "SECRET HISTORY OF THE CREDIT CARD" (written by Lowell "The Insider" Bergman): "The median FICO score is 720 out of a possible 850."
      • Take Two: "The median score is about 725."
    • Fair Isaac: "The Median FICO Score in the U.S. is 723."
  • Now, order FICO score by phone (as opposed to Internet only): 800 FICO SCORE (800-342-6726)
  • GAO
  • Insurance scoring
    • Michigan
      • "The insurance industry filed suit against the state because it said Michigan overstepped its bounds last week by banning companies from factoring in credit scores in the price of insurance."
      • "The rules are set to take effect July 1. Insurers are required to present new rate calculations by May 1."
    • Delaware
      • "A proposal that would keep insurance companies from using a person's credit history to help set car and homeowner insurance rates cleared a Senate committee on Wednesday and will head to the full Senate for a vote."
      • "Delaware's insurance commissioner wants to make it illegal for insurance companies to use credit scores to determine eligibility for coverage."
    • Texas
      • "Insurance companies in Texas overcharged homeowners and drivers by $4 billion last year despite recent legislation designed to limit rising rates, according to a report released recently by two state consumer groups."
      • "In reaction, a spokesman for the Texas Department of Insurance said a rollback is already under study, while a carriers' trade group said the high profits were the result of an unusually low incidence of claims driven by bad weather." So, are weather patterns a factor in calculating rates? ed.
    • "The truth behind Insurance Credit Scoring"
  • "PHILADELPHIA — Prosecutors in the City Hall pay-to-play trial closed their case against two Commerce Bank officials Friday, claiming they ignored bank policy and dismal credit scores to award loans to former city treasurer Corey Kemp in exchange for business... 'This case is about money,' Parry said. 'Great, big, huge, whacking chunks of money.'"
  • Liz Pulliam Weston, the book tour:
    I have an extended example in the first chapter of the book using two women, one who has a 750 score and one who has a 650 score. The second woman pays significantly more on her credit cards (an average of 19.9 percent, compared to 9.9 percent for the woman with the better score), on her auto loans (8 percent on average, compared to 5 percent) and on her mortgage (7.375 percent, compared to 5.5 percent). I got the rates from experts on credit card, auto and mortgages rates.
  • I read somwhere that...
    • "They have a new pilot program featuring an FHA loan with a 3/1 ARM at a fixed rate of 4.87 percent for three years. Loans can go up to $110,000 with a credit score as low as 580... "
    • From the Anybody-Can-Get-Publicity-Through-Google Department: "Poor Advice Costing Home Buyers Thousands" - "This is just nonsense!... The average homebuyer only has the Mortgage Professional [sic] to protect them from making poor financial choices."
  • Pamela Yip, Dallas Morning News: "You can call me a pessimist, but when a recent survey shows that almost half of Americans don't understand key facts about credit scores, that's nothing to be proud of."
  • The 800 Club
    • "Obtaining 800 is probably unrealistic," says Craig Watts, consumer affairs manager for Fair, Isaac & Co., the company that compiles the FICO scores that most lenders use when making lending decisions.
    • Unrealistic? This graph makes it look as though 11% of the people have a score over 800.
    • Fair Isaac team member Suze Orman, stating that you can get THEE lowest rate with a below average (since the median is 723) credit score: "To get the lowest possible interest rate on your credit cards, you need to have a FICO score between 720 and 850."
    • Eileen Ambrose, Baltimore Sun: "If personal ads were pragmatic, you might see a pitch like this: Single female with 820 credit score seeks single male with 800+ score who enjoys moonlit walks on the beach."
3/27/05
  • CFA: "DO YOU KNOW THE SCORE ON CREDIT SCORES? Take this quiz and find out!"
  • FICO or Fake-O: Michelle Singletary, Washington Post:
    "'The confusion and irritation of (consumers) is understandable,' said Craig Watts, public affairs manager for Fair Isaac. 'It could be avoided if Experian, TransUnion and their various consumer Web sites would only be upfront to consumers about the nature of the consumer scores they sell — they aren't FICO scores, they aren't widely used (if used at all) by lenders. They are at best someone's estimate of what the consumer's true FICO score is.'"
  • Trying to get some straight answers about balances
    • Experian:
      • "Keep balances low on credit cards and other 'revolving credit.'"
      • "Ideally, you should keep your utilization ratio below 50%, says Maxine Sweet of the credit bureau Experian."
    • Equifax: "Try to keep your total account balances as low as possible."
    • Fair Isaac: "Keep balances low on credit cards and other 'revolving credit.'"
      • WSJ: "Never use more than 50% of your limit on any single credit card -- even if you pay off your balance every month."
      • Kiplinger: "As a benchmark, Fair Isaac prefers that you limit your balances to less than 50% of your available credit."
      • Money: "Reduce your credit card balances -- generally, it's good to keep your balances at or below 25 percent of your credit card limit."
    • TransUnion: "Balances above 50 percent of your credit limits will harm your credit."
    • Money magazine: "The more you can do to get your balances down to less than 50 percent of your credit limit, the higher your score."
    • CFA survey: "And, more than one-quarter (28%) believe incorrectly that using a credit card’s full credit line will improve one's score."
    • And, the moral of the story: Why bother? - Washington Post, Kenneth Harney: "The secret is this: Your credit card company may be depressing your credit scores by not reporting your credit limit to the three national credit bureaus."
3/21/05
  • FTC, public comment from 280: "Determination of Fair and Reasonable Fee to Be Charged by a Credit Reporting Agency for Consumer Credit Scores"
  • Fannie Mae's (politically correct, backhanding FICO) FAQ:
    "Even though FICO scores remain a valuable tool for assessing credit risk, they are proprietary. Therefore, Fannie Mae is unable to precisely disclose the components of the score. The Fannie Mae "Mortgage Consumer Bill of Rights" states that consumers have the right to know what is behind a lender's mortgage decision, to see all of the factors that go into a lender's determination of their creditworthiness."
  • CFA survey
    • Michelle Singletary, Washington Post: "Credit scores are becoming the most important financial number in people's lives," [Stephen] Brobeck [Consumer Federation of America's executive director] said during a teleconference."
    • Sarah Max, CNN/Money: "In the meantime, make sure you're not falling for any of these common credit score myths."
  • Seena Simon, Houston Chronicle, 3/19/05: "Bad credit can cost you a job - More companies deciding to hire based on ratings" - "People who are broke may be tempted to commit fraud not only against their own employer, but potentially against their clients, employers fear... They also could be unreliable and irresponsible, private and government employers figure."
  • Spamming Google News for fun and profit
    • See this link to a story on MSN Money titled "When paying bills can hurt your credit" published on the creditscoring.com index page on February 9, 2005.
    • See this Google News search giving the date of the story (at this writing) as March 12, 2005.
    • Google:
      2. How far back does Google News go?

      Google News includes articles that have appeared within the past 30 days.

    • Watch Google News to see if the date of the story changes.
3/17/05
  • CFA survey
    • CFA: "Washington, D.C. and Minneapolis — March 15, 2005 — According to a new survey by the Consumer Federation of America (CFA) and Fair Isaac Corporation (NYSE:FIC), developer of the FICO® credit score used by most lenders to evaluate consumer credit risk, almost one-half of American consumers do not understand key facts about credit scores:... "
    • Fair Isaac: "Developed jointly by Fair Isaac and Consumer Federation of America, this pamphlet provides a brief but complete overview of credit scoring, including factors that influence credit scores, where you can obtain your scores and tips on improving them."
  • In Delaware: "A proposal that would keep insurance companies from using a person's credit history to help set car and homeowner insurance rates cleared a Senate committee on Wednesday and will head to the full Senate for a vote."
  • Rob Johnson, The Tennessean: "Ford Motor Credit must restructure its lending practices after a federal judge found that the automotive lending giant has been discriminating against its minority customers... Lenders use two numbers to create the annual percentage rate familiar to consumers. One is the buy rate, which factors in a customer's credit score."
2/17/05
  • A fool and his money... - TransUnion and its partner, the The Motley Fool
    1. TrueCredit.com (TransUnion) Press Release: "... In February 2005, TrueCredit will award anyone in America who has earned a score of 850 $1,000 and a lifetime of free Credit Alerts to help them maintain their perfect score and guard against identity theft... "
    2. The score is not the FICO.
    3. The Motley Fool: "There are 11% who easily slip by the bouncer at the bank with a credit score of 800 or above, according to Fair Isaac, inventor of the FICO scoring system that assigns a three-digit credit GPA based on your borrowing and bill-paying history... If you have all-star credit -- and about six of you reading this do have a credit score of 850 -- there's $1,000 in cash and a lifetime of free credit-watch services with your name on it."
    4. The Motely Fool the next day, even worse:
      Do you have a stellar reputation with your banker? A FICO score that's flawless? If you have a perfect credit score -- and about six of you reading this do -- there's $1,000 in cash and a lifetime of free credit-watch services with your name on it.
    5. creditscoring.com: "You are misleading consumers. Will you publish a clarification?"
    (full story)
  • ChoicePoint debacle (News Releases)
    • Bob Sullivan, MSNBC: "The incident involves a wide swath of consumer data, including names, addresses, Social Security numbers, credit reports and other information."
    • San Francisco Chronicle: ChoicePoint was informed of the intrusion by law enforcement in October.
    • Reuters: "In several recent filings with the Federal Trade Commission, Hoofnagle [EPIC] has argued ChoicePoint should be subject to a law that allows consumers to view their credit reports and see who else is accessing them."
  • MarketWatch: "One late payment could push an 800 down to 640. When someone with an 800 'stumbles for the first time it puts them in such a different pool of consumers their credit risk increases hugely,' [Fair Isaac's] Watts said." [alt][alt]
2/9/05
  • Texas
    • "Senator Rodney Ellis Condemns Credit Scoring Decision - Insurance Commissioner "turned his back" on minority Texans: "It doesn't matter if credit scoring is actuarially justifiable, it is morally unacceptable," said Senator Ellis."
    • Waco Tribun-Herald: [Commissioner] "Montemayor, in a letter to Gov. Rick Perry and legislative leaders, wrote: "I do not have a legal basis to ban a practice that has a disproportionate impact if it produces an actuarially supported result and is not unfairly or intentionally discriminatory." (see "disparate impact")
  • Michigan
    • “'Inflating the base rates of home and automobile insurance and using insurance credit scoring is unfair to consumers and illegal under the Michigan Insurance Code,' said [insurance commissioner] Watters."
    • "I'm so disgusted that they're allowed to use credit history to determine if I'm going to have an accident or not," she [consumer Sherry Luckett] said. "To me, it's another way of redlining."
    • State of Michigan: Credit Scoring Activity
  • More FICO/Fake-O controversy(!): "Experian and TransUnion provide scores that should be considered estimates because they sometimes vary from the FICO score, said Ryan Sjoblad, a Fair Isaac spokesman in Minneapolis."
  • Settling
    • Steve Bucci, president of CCCS Credit Advisors: "A settled charge-off, in most cases, will not raise your score and might lower it, depending on the strength of the rest of your report."
    • MSN Money: "'Settling the account can add a new element to its record at the bureau,' [Fair Isaac's] Watts said. 'Since that element's date would be more recent than the original item, it can end up lowering the score.'"
    • Another explanation from www.fhahomeloanmortgage.com: "For these account types, the most important date you can look at is the 'Date Last Reported'. If the last reported date is older than two years on a debt, settling this account may indeed have a negative initial impact on your FICO score and take 90 to 120 days or more to recover from."
1/28/05
  • TransUnion: "In February 2005, TrueCredit will award anyone in America who has earned a score of 850 with $1,000... " (WARNING: "TrueCredit is not connected in any way with Fair, Isaac and Company; the credit score provided here is not a so-called FICO score.")
  • Differences in FICO scores, geographically: "The 2003 Equifax average Beacon credit score computed for metropolitan areas." (press release)
  • Experian PLUS Score (the anti-FICO score) study: "In fact, the national average credit score for consumers with debt above the national average is higher than the average credit score for those with debt below the national average."
  • Utah Association of REALTORS Statement of Policy: "The basis for Fair, Issac credit bureau (FICO) scores, as related to mortgage finance, is flawed because the integrity of the data contained in the score is highly questionable; the components of the score do not include some elements that are fundamental to the mortgage lending process, e.g., capacity to repay the loan and collateral; and the time required to correct errors in credit scores is much too long."
  • SBA loans - "Banks place heavy emphasis on FICO credit scores—many require a minimum FICO of 700+ for loan approval"
  • Fannie Mae
    • 8/04: Minimum FICOs (700-720) for certain adjustable rate programs
    • 11/02: Minimum FICOs for certain refinance loans
1/08/05
  • Kenneth Harney: "But the card company failed to report the woman's credit limit - or even her highest balance. This knocked a whopping 66 points off of the woman's credit score"
  • Fair Isaac: 'Right now, it's used (to assess how to offer) elective surgery financing,' said Craig Dillon, vice president for global scoring with FairIsaac, creator of the FICO score."
  • TransUnion (formerly known as Trans Union)
    • "But a separate case that involves 11 other family members still could lay out in public the very private family's plan to split an estimated $15 billion empire."
    • "Two years ago, Ms Pritzker, whose professional name is Liesel Matthews, filed a lawsuit accusing her father and other family members and advisers of secretly stripping her trust funds of more than $US1 billion when she was a child."
    • "Liesel and Matthew Pritzker claimed in the suit that their father emptied their trust funds in 1994 'with malicious and vindictive intent' because of animosity over his divorce with their mother."
    • "The Pritzkers are one of the four richest families in the United States."
    • The settlement avoided a purported plan to devolve the Chicago family's $15 billion empire while simultaneously catapulting the two college students, age 20 and 22, into a financial stratosphere that would make the likes of Paris Hilton green with envy.
    • "The Pritzker fortune includes the 209-hotel Hyatt chain, commercial real estate, industrial businesses and a 25 per cent stake in Royal Caribbean Cruises."
    • (related)
1/05/05
  • The state of things in the State of Texas. The Department of Insurance: "Furthermore, the study found that Black, Hispanic, young, and low-to-moderate income policyholders tend to have worse credit scores than White, Asian, older, and high income policyholders." (AP)
    • Dallas Morning News: "'This study shows that credit scoring is nothing more than economic redlining,' said Alex Winslow, executive director of the consumer-oriented group Texas Watch."
    • (Texas could have taken that one right out of Freddie's playbook) Way back last century, 1999:
      • "'Freddie Mac managed to ensure the continuation of the stereotype that blacks are too dumb and too irresponsible to handle their own finances.'"

      • Singletary further remarked that the news of the Freddie Mac survey had made blacks the brunt of media mockery, quoting a joke made by "Politically Incorrect" host Bill Maher during one of his recent opening monologues: "A survey of credit showed that 48 percent...of African Americans have bad credit. And also, they're not thrilled about the term 'Mastercard.'" Singletary responded, "Ha. Ha. I'm laughing so much it hurts."
    • Milwaukee Journal Sentinel columnist: "Barksdale was more worried that in a city such as Milwaukee, bad credit can become just another large millstone around the necks of black job-seekers."
  • PBS Frontline/New York Times: "THE SECRET HISTORY OF THE CREDIT CARD, Credit Scores - What You should Know About Your Own" (video)
  • (Free) publicity department: Smartmoney.com: "The Credit Card King" "So imagine our surprise when we found someone who for years has been doing exactly the opposite — and yet sports a credit score in the 800s." "SmartMoney.com: You have 80 credit cards. How did you get to this point?" (this link is for amusement purposes, only)
  • Kenneth Harney: "How far can your credit score plummet when your credit card issuer withholds your credit limit in its reports to the three national bureaus?"
  • MSNBC: "Capital One sued over marketing practices - Minnesota AG says ‘fixed rate’ ads are misleading": "The limit was lowered because her credit score had dropped, according to the lawsuit."
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