PART ONE
The Credit
Scoring Site

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



creditscoring.com
in the media

Clark Howard
USA Today
Newsweek
Chicago Tribune
The Christian Science Monitor
HowStuffWorks
Federal Reserve
Credit Repair
The Detroit News
The Columbus Dispatch
The Augusta Chronicle
Bankrate.com
Bankrate.com
Realty Times
Nolo
About.com
MoneyCentral Radio
Realty Times
Money Maze Radio
Updates
Blow by blow, from day one

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

12/18/02

  • Consumer Federation of America study Now (since you're sweating your score), here's Fair, Isaac with A credit score: A great gift this Christmas!
  • Michigan
    • Commissioner, Office of Financial and Insurance Services: "The Use of Insurance Credit Scoring in Automobile and Homeowners Insurance - A report to the Governor, the Legislature and the People of Michigan"
    • Battle Creek Enquirer: "Credit-score information is needed" - "We still don't understand the correlation between a person's credit rating and their insurability as a motorist, but at least now the state will provide us with some of the tools we need to learn more."
    • Holland Sentinel: "Insurance credit scoring data to be available online, by phone" - "
    • Detroit Free Press: "Agency sets rules for insurance rates - Companies using credit scores to determine cost must inform customers" - "All consumers really lack meaningful information about insurance credit scores," Fitzgerald said."
  • Forbes: "Five Ways To Combat Rising Insurance Rates" - "The standard joke is that Realtors used to worry about whether their clients could qualify for a mortgage. Now they worry about whether they qualify for insurance"... "It isn't always fair, and it's often controversial, but all the major insurers use such systems, so it is helpful for you to get a look at your own score to learn what you're up against."
11/23/02 Updates
  • Fair, Isaac: "TransUnion FICO® scores available to consumers through myFICO" - "'The initial products we created with Fair, Isaac represent a major step forward in our ongoing efforts in consumer credit empowerment,' said Harry Gambill, TransUnion CEO."

    The big question: Did he say that with a straight face? See Case 2, creditaccuracy.com for his real ongoing efforts.

    More Comedy arrow10.gif - 5.4 K    "TransUnion's leadership in consumer credit information and education, paired with Fair, Isaac's leadership in analytics, sets the stage for us to create new useful tools for consumer credit empowerment in the U.S."

    Empowerment. OK, whatever. The spinning is just beginning.

    See the "education" this lady got.

  • Forbes.com: "The man who knows too much" - "Fair, Isaac's Tom Grudnowski leads a team of math whizzes who help companies learn everything about your credit history, buying habits and what you're likely to do next. Should he be stopped?"
  • 2001: "Fair, Isaac director leaves with a bang" - "In an extraordinary resignation letter, a longtime Fair, Isaac & Co. director and retired executive said the San Rafael-based company would be best served without President and CEO Tom Grudnowski at the helm, and it should be sold."
  • BusinessWeek: "Fair Weather for Fair Isaac" - "The company influenced over 25 billion transactions in fiscal 2003. From September, 2001, to August, 2002, if you had a credit card, used an ATM, had a cell phone, received a marketing call, got injured in a car accident or on the job, or bought a car or house, chances are Fair Isaac was involved and got paid accordingly."
  • Liz Pulliam Weston: "But unlike 'hard' inquiries -- those made by lenders when you apply for credit -- inquiries made by insurers, and by you when you want to see your own credit history don't hurt your FICO score."
11/01/02 Updates
  • Freddie Mac
    • Washington Post: Suit Against Freddie Mac Focuses on Consumer Protection - "The class action suit against Freddie Mac charges that hundreds of thousands of home loan applicants nationwide have been rejected or assessed higher fees through the corporation's electronic underwriting system without receiving the required notices and protections afforded to them under the Fair Credit Reporting Act."
    • Realty Times: "Weidman's "class" of similarly-affected applicants— borrowers who would receive monetary damages if the suit is successful— includes all mortgage applicants who were quoted a higher rate or rejected through Freddie Mac's Loan Prospector system during the past two years."
  • Fannie Mae
    • Realty Times: Fannie Mae Sued For Alleged Discrimination Against Minority Borrowers - "Rahmaan's suit asks the court to bar Fannie Mae from "using or relying on racially discriminatory credit scoring systems" and from purchasing loans underwritten by such systems."
    • Reuters:
      Former HUD official Allen Fishbein said that without speaking of the merits of the Rahmaan lawsuit, lack of knowledge about the automated underwriting systems could lead borrowers who have been denied a loan to question its fairness. Given how broadly it is used to determine whether individuals qualify for loans, the government would do well to review the system, he said.
    • Washington Post: "Freddie Mac had no immediate comment on the suit, but a spokeswoman, Sharon McHale, said the 1999 study underlined 'the disparities that exist in credit histories' among racial groups and 'showed the need for better credit education in minority communities.'"

      "The complaint cites a 1999 study by Fannie Mae's rival mortgage investor, McLean-based Freddie Mac, as demonstrating that the 'raw credit data upon which the entire scoring system is based is undeniably skewed by race.'"

      From 1999:

      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."
10/26/02 Updates
  • Apparently, they were doing the wrong thing, but now want to "do the right thing" and be the leaders. Fair, Isaac:
    "The inevitability of this information getting into consumers' hands because of legislation was very apparent," Sjoblad said. "We wanted to take a leadership role and do the right thing."
    A (recent) history lesson: "Seemingly oblivious that the times and the tide are both turning against it, the Marin County financial software company is struggling to keep its coveted credit-scoring system out of the view of consumers." - June, 2000

  • For real estate agents (from the self-proclaimed "experts"):
    "myFICOSM, the consumer division of Fair, Isaac and Company, is pleased to offer you an exclusive set of resources and discounts offered through NAR's REALTOR VIPSM Program and designed to serve your professional needs."

    Refrigerator magnets, MOVE OVER! - "myFICO services make great promotional tools and closing gifts for your prospects and clients."

    Press release

    NATIONAL ASSOCIATION OF REALTORS - GREAT MOMEMENTS IN CREDIT SCORING HISTORY:
    "Fair, Isaac invented the FICO score... "

    "Realtors® can receive a 10 percent discount on the purchase of Score PowerTM... "

    (enjoy your $1.30)

  • Late (or, "Suckering Journalists for Free Publicity— then Failing to Deliver")(an old advertising guy trick)
    • "Also this summer, Simon said Fair Isaac plans to offer a credit monitoring service that would alert consumers when changes are made to their credit reports at all three agencies."
    • July 5: "Still, Fair, Isaac within 45 days expects to offer credit reports from all major credit bureaus as well as add a FICO score monitor that would alert consumers to score changes." (From selling Coke and Lees Jeans to credit scores. The Twin Cities boys.)

    90 days, and counting

  • Fair, Isaac: Only if you promise not to tell, G-Men: "Fair, Isaac discusses insurance bureau scores with regulators on an educational basis and on a model disclosure basis with confidentiality agreement in place."
  • Federal Reserve Bank of San Francisco:
    Data from the Mortgage Information Corporation (MIC) show Fair Isaac Company (FICO) credit scores of borrowers whose loans were included in secondary market mortgage pools averaging 605 for borrowers represented in subprime pools, as opposed to 721 for the lower risk "prime" mortgage borrowers. (In the FICO system, scores of 620 or below represent, in the absence of countervailing circumstances, unacceptable levels of credit risk for lenders in the prime mortgage market.)
  • Standard & Poors: "According to the report, "Trends in Residential Mortgage Products: Second-Quarter 2002 LTV Ratios, FICO Scores and Credit Support Levels," the FICO scores among the prime issuers of 30-year, fixed-rate pools ranged from a high of about 740 to a low of approximately 722 in second-quarter 2002, compared to 746 and 719, respectively, in the first quarter. In the prime category, the average FICO score for the 30-year, fixed-rate pools remained relatively constant at 729, compared to the first-quarter average of 730.
  • Credit Scoring and Disparate Impact - "Conference Paper for Midyear AREUEA Meeting and Wharton/ Philadelphia FRB Credit Risk Conference"
  • “Our [the industry] credit-scoring models are based on credit histories that reflect only prosperity… loans that were approved during the period of economic expansion may now be affected by changed circumstances.”- Fed Governor Olsen, 5/21/02
10/25/02 Updates
  • Equifax / ChoicePoint
    • "For the first time ever, you can purchase the same insurance score used by hundreds of insurance companies."
    • "Atlanta, OCT. 22, 2002 - Equifax Inc. (NYSE:EFX), today announced it has teamed with ChoicePoint (NYSE:CPS) to provide consumers with the scores most often used by auto and homeowner insurance underwriters... 'We've worked with industry and government leaders for nearly two years to find a way to give consumers easy access to their own insurance information,' said Derek V. Smith, ChoicePoint's chairman and CEO."
    • "The Americans will always do the right thing— after they've exhausted all the alternatives." - Winston Churchill
  • Farmers Insurance
    • Texas Governor, AG: Gov. Perry, Attorney General Cornyn Announce Deceptive Trade Lawsuit Against Farmers Insurance- "Farmers Insurance has used credit history as a significant factor in setting premiums, without disclosing to its policyholders the adverse impact of doing so. In addition, the company’s use of credit scoring constitutes illegal discrimination based on how the credit history for policyholders is used to calculate premiums."
    • Farmers Insurance: Farmers Insurance Announces Non-Renewal of Texas Homeowners Insurance Policies-- TDI's Recent Resolution Offer Reveals State's Lack of Understanding, Unwillingness to Negotiate.
9/7/02 Updates
  • The Washington Post: Air Security Focusing on Flier Screening, by Robert O'Harrow Jr., Washington Post Staff Writer
    Their mission was to demonstrate how artificial intelligence and other powerful software can analyze passengers' travel reservations, housing information, family ties, identifying details in credit reports and other personal data to determine if they're 'rooted in the community' -- or have an unusual history that indicates a potential threat... HNC Software, now a part of Fair, Isaac & Co., won the largest grant, $551,001.
  • BusinessWeek: How Fair Is Fair Isaac?, By Jane Black - "The increase was a surprise because neither Alexander nor her husband, Larry Jackson, had been in an accident or placed a claim at any time during their six years with Pemco."
  • Mailbag:

    From: xxxx@xxxx
    To: "'gfisher@erinet.com'"
    Subject: Credit Score Letters
    Date: Fri, 6 Sep 2002 19:00:41 -0400

    I can't believe I just sat here and read the ENTIRE transcript of your battle. It's hilarious though :-D I'm glad there is someone out there that has the time, patience, and intelligence to stand up to the Credit Bureau Bullies! Keep it up...

    Thank you.

    The story continues in Part Two, in real time, now. See http://www.creditaccuracy.com/cases.htm and http://www.creditaccuracy.com/0002.htm.

    Other readers' comments
  • AARP Public Policy Institute: CREDIT SCORES AND MORTGAGE LENDING - "However, as the use of credit scores continues to expand, issues relating to consumer access to credit scores, the cost to consumers for this access, the consistency of credit scores, and the accuracy of credit scores will continue to be raised."
  • Chicago Tribune: Credit record and score: They're not the same, by Marilyn Kennedy Melia
    Consider, for instance, this recent query from a reader: "In order to take control of my finances, a few years ago I canceled my credit cards and worked with a debt management service in order to get the interest rates reduced and to pay my monthly fees through this service. This has been very successful in reducing my debt, but I recently applied for a mortgage and was told that doing this has affected my credit score similar to a bankruptcy ... Is this true?"
  • References to The Credit Scoring Site
    • HowStuffWorks.com: "More Great Links: The Credit Scoring Site"
    • Consumer Credit Counseling Service of Nebraska: "Then move to the Internet for in depth information... Credit and Credit report topics--- ... creditscoring.com"
    • Kansas.com/Wichita Eagle: If you want more information about credit reports and credit scoring, visit www.creditscoring.com or www.fairisaac.com.
  • www.transunioninsurance.com - You can blame TransUnion; according to them, they pioneered it.
    • "Less than a decade ago, TransUnion proved the correlation between financial behavior and risk profile, pioneering the use as a solution provider for the insurance industry. Today, we are a leading provider of in-depth financial behavioral data and the driving force behind the most sophisticated risk evaluation and lead generation tools. Our data-based solutions have literally reshaped the industry... lowering loss ratios, and increasing efficiency for the nation's top insurers." (see the search for what TransUnion "proved")
    • Four reasons (sounds familiar): "ASSIST delivers up to four reason codes with each score, helping customers, agents and regulators,alike, understand the reasons behind each score used as part of an underwriting decision. We also provide an informative educational program that makes it easier for you to do business in states where disclosure of underwriting criteria is required."
  • Letter to Nolo: "I recently applied for a loan to buy a house and was rejected because my credit score was too low. I had no idea I even had a credit score! The lender told me that the score doesn't show up on my credit report. How can that be?"
8/20/02 Updates
  • In Congress: H.R.3607 - "Protecting Our Communities From Predatory Lending Practices Act (Introduced in House)" (1 cosponsor)
      (g) DISCLOSURE OF CONSUMER'S CREDIT SCORE REQUIRED- If a creditor obtains or calculates a credit score of any consumer in connection with any consumer credit transaction, or any application or solicitation for any consumer credit transaction, which is or is to be secured by the consumer's dwelling (without regard to whether the transaction is consummated), the creditor shall disclose, in writing--

        `(1) such credit score to the consumer; and

        `(2) the methodology used for the evaluation of the credit score, including the statistical basis for the calculation of the consumer's credit score from the credit history of the consumer.
  • California Laws
  • The Third Consumer Credit Reporting World Conference, October 20-22, 2002, Sydney, Australia (previous venues: San Francisco! Rome! Maybe Dayton, next!)
    • On the Big Agenda at the Big Meeting: "Disclosure and marketing of credit reports/scores to consumers" presented by (mystery guest (hot potato)).
    • (use the MIDI "Lights! Camera! Action!" for background (mood) music ") Hey, Kids! What luck-- our favorite stars, all in one great show!

      Send an email commitment for $1! If there's enough response, we'll find some respectable independent company to take the money so you know it isn't going for plane tickets or a dinner cruise (and, saaaaaay! Is Georgetown U. on a break that week?-- now, would that be a convenient Outback working vacation, or what?)! With $3000, we can sponsor a full-page ad in the conference notes and space on the web site!

      Come on! It'll be fun! In the ad, we'll ask the U.S. credit bureau association (aka "The Barry and Stuart Show") why it won't make any more replies to the email at creditaccuracy.com. And, we'll ask the chairman what the deal is with Case 2!

      OK-- if the credit bureau's association sponsors a conference in Australia, and they get their money from the credit bureaus, and the credit bureaus get their money from you... Come on credit boys: Who's your daddy?

8/14/02 Updates
  • In the U.K.: It doesn't mean much to us in Britain - yet. But every American needs to know their 'score' - "Their infobanks are vast but notoriously flawed."
  • Dallas Morning News: "After inquiring about the increases, she was told that rising mold damage claims across the state were a big cause... But she was stunned when her agent cited another factor – her credit history."
  • Handbook of Credit Scoring edited by Elizabeth Mays
8/11/02 Updates
  • Happening now, in real time. Case 2 of Part 2, creditaccuracy.com: Dirty Data (It's a three-act play: "The second act, the middle, holds the dynamic, dramatic and surprising conflicts and tensions introduced in the first act and resolved in the third act.")
  • creditscoring.com is recommended in Nolo's manual: Credit Repair, 5th Edition, Sep '01
  • Big story: TransUnion Releases Its FICO Score, but forgot to tell anybody. Score page is within myfico.com domain.
    • FICO vs. Fake-O (Why would anybody want the "TransUnion score," now?)
      • FICO score news on TransUnion's press release page - missing.
      • TransUnion news on Fair, Isaac press release page - missing.
    • Fourth step in online ordering process: "Choose Your Score" (only if you really want to see the choice page-- click on "Order and View Online," "order now," and "Agree.")
    • TU Q&A
      Question: "Where do I pick up my TransUnion Credit Report and FICO Score order?" "Where's my FICO score?"
      Answer: "1. Go to https://www.tuscores.com/login.jsp... "

      Question: "How long can I access my TransUnion credit report and FICO Score online?"
      Answer: "Your TransUnion credit report and FICO Score® can be accessed online, 24-hours-a-day for a period of six (6) days from the date of your purchase."

    • Fair, Isaac plays Equifax and TransUnion: myfico.com home page still boasts that the Equifax service is exclusive: "[Equifax's] Score Power is the only consumer service that delivers FICO scores – the world's leading credit scores, used in billions of credit decisions a year."

  • The Inquiry Inquiry - Everybody's got an opinion
    • Already dubious history tainted by controversy
      • The Credit Scoring Site reported:
        Trans Union and and Fair, Isaac found a flaw in their practice of lowering scores based on "inquiries" (people accessing your credit report). "Fair, Isaac found it could increase the operational effectiveness while reducing the volatility of the score due to inquiries." They always make the simplest things sound so important.
      • The Gartner Factor
        • Gartner Says Online Lending Industry Needs to Correct Credit Scoring Methods - Internet Users Can Damage Their Credit Scores by Inquiring About Loans Online
        • Fair, Isaac's immediate response: "So far what we have from Rasha is an interesting anecdotal possibility."
      • Fair, Isaac getting grilled in Washington: "This has been a topic of some controversy."

    • Experian:

      Dear SHB,

      There are two types of inquiries on your credit report:

      • those resulting from your application for credit
      • those resulting from prescreening or account monitoring

      Inquiries are divided into two sections on your credit report. Creditors can see only inquiries resulting from your application for credit...
    • TransUnion (formerly Trans Union):
      Question: Does every inquiry affect my score?
      Answer: No, the only inquiries that may affect your credit score are those initiated by you for specific credit transactions, including mortgage, credit card and auto applications . The score does not include inquiries when:

      - A credit grantor has received your name and address information for the purpose of offering you credit.
      - A credit grantor with who you have a business relationship has posted an account review inquiry (requests made by lenders to review your account with them).
      - An authorized potential employer has received your credit report.
      - You have received your personal credit report.

    • Equifax:
      What does BEACON® Fair, Isaac ignore?

      • Your race, color, religion, national origin, sex, or marital status
      • Your age
      • Your salary, occupation, title, employer, date employed, or employment history
      • Where you live
      • Certain types of inquiries such as promotional, account review, insurance or employment related inquiries
      • Any information not found in your credit report
      • Any information that is not proven to be predictive of future credit performance
    • Fair, Isaac:
      Does every inquiry affect my score?
      No. FICO scores only consider inquiries initiated by you for business purposes. These include mortgage applications, credit card applications and auto loan applications. If you order your credit report from a credit reporting agency — such as to check it for accuracy, which is a good idea — the score does not count this, as it is not an indication that you are seeking new credit. Also, the score does not count requests a lender has made for your credit report or score in order to make you a "pre-approved" credit offer, or to review your account with them, even though you may see these inquiries on your credit report.
    • The Equifax/Fair, Isaac syndicate:
      FICO scores consider a wide range of information on your credit report. However, they do not consider:...

      ... Certain types of inquiries (requests for your credit report).
      The score does not count "consumer-initiated" inquiries — requests you have made for your credit report, in order to check it. It also does not count "promotional inquiries" — requests made by lenders in order to make you a "pre-approved" credit offer — or "administrative inquiries" — requests made by lenders to review your account with them. Requests that are marked as coming from employers are not counted either.


      Your score takes into account:...

      ... How many recent requests for credit you have made, as indicated by inquiries to the credit reporting agencies.
      Inquiries remain on your credit report for two years, although FICO scores only consider inquiries from the last 12 months. Note that if you order your credit report from a credit reporting agency — such as to check it for accuracy, which is a good idea — the score does not count this, as it is not an indication that you are seeking new credit. Also, the score does not count requests a lender has made for your credit report or score in order to make you a "pre-approved" credit offer, or to review your account with them, even though you may see these inquiries on your credit report.

      ... Length of time since credit report inquiries were made by lenders.



      (from the List of FICO Score Factors):
      Search for and acquisition of new credit
      • Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account
      • Number of recent credit inquiries
      • Time since recent account opening(s), by type of account
      • Time since credit inquiry(s)
      • Re-establishment of positive credit history following past payment problems
7/14/02 Updates
  • "The Experian National Risk Model"
    Someone's always playing corporation games
    Who cares? They're always changing corporation names
    - Starship
    6/16/02 - creditscoring.com update: "'The Experian National Risk Model's exclusive score range of 0 to 1,000 (low score equals low risk), translates directly into statistical probability.'" (the Internet address experian.com/catalog_us/models_consumer/nationalrisk.html is now dead)
    7/14/02 - Remnants: A Google search returns the same dead link. Experian gives the "Scoring and Modeling" list without the "National Risk Model."
    1/30/02 - Experian: "The National Risk Score is used by lenders across the nation. We have altered the scale to make it easier to compare to other well-known models."
    Taking up shelf space: Scorecard vs. CreditExpert

    We gotta get organized.

    Experian, drop your score. The FICO/Equifax cartel cleaned your clock and you are just trying to confuse people by distributing your Fake-O like the FICO. You even gave yours the same price ($12.95) and changed its scale (from 0-1000 (which actually made sense) to 340-820 (huh?)) so it looks like a FICO range number. Come on, does it really have exactly the same monetary value as the Fair, Isaac score? If you had any pride, you would charge more. The only way you are going to compete effectively is to come up with a completely unique mousetrap.

    Stop playing games.

  • Rankled - Mortgage Bankers Association to Federal Reserve: "This statement is generally inaccurate... "

    Federal Reserve: "In July, an addendum to the third installment (PDF 384KB) was published to include comments from the Mortgage Bankers Association of America."

    To: linda.a.aubuchon@stls.frb.org
    From: Greg Fisher
    Subject: "PERSPECTIVES ON CREDIT SCORING... " missing information

    The "SUPPLEMENT TO THE THIRD INSTALLMENT OF A FIVE-INSTALLMENT SERIES" ("PERSPECTIVES ON CREDIT SCORING AND FAIR MORTGAGE LENDING") document on your web site appears incomplete, ending with "In the latter case, the pro-" on page five, as if there are actually six or more pages.

    http://www.stls.frb.org/caffairs/pubs/addendum3.pdf

    Will you publish the rest of the document?

6/28/02 Updates
  • Kenneth Harney: Data-Correction Services Help Borrowers Hurt by Wrong Scores - "Could the presence of unseen bad data in your files cost you two or more percentage points -- and potentially tens of thousands of dollars in higher monthly payments -- on your home loan? Absolutely."
  • Newsweek, July 1 edition: Credit: The Real Score - Finding out your financial rating - "Instead of feeling like a blue-chip stock, suddenly I was more like a walking junk bond... And if you’re going to be shopping for a loan, it may be worth checking your score six months ahead of time, since it could affect the interest rate you pay."
  • déjà vu - Insurance Credit Scores: "... a crypto-secret buried in a vault beneath the earth and if they reveal it to you they have to kill you."
6/16/02 Updates
  • Wacky comment of the week: "We don't stop at a credit score. We actually analyze the credit... Someone with a moderately low (FICO) credit score, 620, could still have perfect repayment history, but they just have a lot of credit."

    FICO scores already consider the amount of credit. Does that guy deny the 800 with little credit?

  • Pennsylvania Legislature: WILLIAMS CALLS TO RESTRICT INSURANCE INDUSTRY CREDIT GRADING
    • "Beginning next week, Williams is urging consumers who believe their insurance costs went up unfairly due to credit grading to report their story toll-free at 1-800-468-0092."
    • Online chat Monday 6/17/02, 10:00 - 10:30 am
  • Score popularity contest: FICO vs. Fake-O
    • Equifax
      • Equifax:
        • "Get Your REAL Score – The One Lenders Use... Score Power™ is the only consumer service that delivers FICO scores – the world's leading credit scores, used in billions of credit decisions a year."
        • "The FICO score is used to make billions of credit decisions each year, including more than 75 percent of mortgage loan originations. In addition, more than 70 of the nation's 100 largest financial institutions rely on the FICO score to determine an individual's credit worthiness."
        • "FICO scores range between 300 and 850." (For a look back at the zany early days, see Fun with Numbers)
      • CNN: "Currently, only Equifax offers consumers their actual FICO score."
    • Experian:
      • "The Experian Credit Score is a generic bureau-based score, developed by Experian, widely used by lenders in multiple industries."
      • "Among bureau-based scores, the most widely used score in the financial service industry is the FICO score generated by the Fair, Issac Company."
      • Sells the FICO, but... "I don't know exactly how the Fair, Isaac models use credit history information to calculate a risk score. That information is kept confidential by Fair, Isaac."
      • "The Experian National Risk Model's exclusive score range of 0 to 1,000 (low score equals low risk), translates directly into statistical probability. For example, a score of 100 equals a 10-percent chance that at least one tradeline will become seriously delinquent in the next 24 months."
    • Trans Union
      • Michelle Singletary, The Washington Post gives Trans Union the worst grade: The Color of Money: Rating the credit raters
      • Betty Lin-Fisher, Knight Ridder Newspapers, on a comment by Trans Union: "If we're going back to the cholesterol scenario that Davis brought up, I see getting the FICO score as my first step and getting a score from a competitor as my second opinion."
      • Have fun trying to find the score range on Trans Union's site. (Trans Union has another, more pressing problem. A dissenting opinion in the U.S. Supreme Court: "The company’s demise will have adverse effects on both the national economy and petitioner’s thousands of employees.")
    • Fair, Isaac: "But now, at least three-quarters of all mortgage lenders use the FICO score as do 23 of the largest 25 credit-card issuers and 40 of the 50 largest financial institutions, said Craig Watts, consumer affairs manager for Fair, Isaac."
    • bankrate.com: Trans Union, Experian to give consumers credit scores, but not the ones lenders use
    • Kenneth Harney: "Anything else may be interesting and even educational. But it may not be relevant in the real world of mortgage lending."
    • CreditXpert: 400 to 900 - "The CreditXpert Credit Score™ is the only credit score designed specifically for consumers."
5/29/02 Updates
  • May 21, 2002: Fair, Isaac and Equifax Give Consumers New Score Power Tools Offering Greater Insights for Managing Their Credit Health - Enhancements Include First-Ever FICO Score Simulator
    "'Offering consumers additional insight into credit scoring is yet another example of how we are demystifying credit reports, scores and the other tools lenders use,' said Virgil Gardaya, general manager of consumer services at Equifax."
    Equifax, 1997: "Um, it's proprietary information and we wouldn't give it out."
  • In Washington state: "Credit scoring is simply a form of financial discrimination," said Sen. Margarita Prentice, D-Renton, the bill’s prime sponsor. "Even if you’ve always paid your bills on time and never had a traffic ticket, your insurance company can cancel your coverage – or double your rates."
  • Insurance: Parting Shots: The Real Truth About Credit Scoring - "Chris Pummer with CBS MarketWatch reported that the California Department of Motor Vehicles did a study 30 years ago that showed people with dark hair had significantly worse driving records than those with blonde or red hair."
  • USA Today: Don't let your credit score strike you out - "More employers are screening job applicants by credit score. Some landlords consult them before renting." (5/5/08 update: Credit bureaus do not include scores in pre-employment screening reports.)
  • Kansas City Star:
    • Credit scores driving insurance rates higher - "He said although insurers claimed to be able to show a statistical correlation, 'they won't show you how they determine it. They say it's proprietary.'"
    • Credit scoring scrutinized in Missouri and Kansas - "'The consumer does nothing but lose,' [an agent] said."
    • Missouri House delays vote on insurers' use of credit scoring - "Missouri is one of more than two dozen states that are considering laws to limit credit scoring."
    • House bill on credit scoring falls short - "Without credit scoring, her premium was $286 for six months. With credit scoring, her premium shot up to $698."
  • The Detroit News: Credit scoring ban sought
  • Wisconsin legislature: History of Assembly Bill 774
  • San Francisco Chronicle: Insurers' credit scoring rankles - "So far, no company has allowed the department to look into its [black] box, Moore says. Some companies have withdrawn proposed rates after the department asked to peer inside."
4/24/02 Updates
  • Study by Georgetown University Credit Research Center utilizing a score you can't even get (the Trans Union FICO)
  • New York Times headline, Sunday, 4/21/02: Borrower Beware: Credit Scoreres are Watching - The article says Fair, Isaac bowed to intense public pressure to release score, and that other credit reporting agencies other than Equifax "concocted" their own scores to give to consumers.
  • Just a reminder: Two thirds of FICO scores are still secret (Trans Union and Experian).
  • Fair, Isaac's latest
    • "Now, Thomas Grudnowski, Fair Isaac's chief executive since 1999, is leading the company into another potentially controversial business: teaching people how to boost their credit scores and to use them to better advantage." (Same story as in 3/20 updates, different site, different headline)(includes picture of a guy in the lowest 45th percentile of those scored)
    • Inside a Fair, Isaac press [alt, 2014-09-04] release (Fair, Isaac and Equifax Mark First Year of Delivering Consumer Credit Empowerment Online): "ScorePower will soon become an even more empowering tool for consumers with the introduction of the first FICO® score simulator for consumers. This interactive feature will help consumers explore "what if" scenarios online and learn how certain habits and behaviors, such as opening a new credit card account, could affect their FICO score over time."
  • A new Web site entitled The Truth About Insurance Credit Scoring
03/20/02 Updates
  • Wall Street Journal (on msnbc.com): Conflict seen in credit score coaching

    Or, maybe you suddenly had trouble finding homeowner’s insurance. In all three cases, the reason could well have been the same: Your credit score wasn’t high enough...

    Nonetheless, Mr. Grudnowski, the company’s (Fair, Isaac) CEO, says there’s no doubt that credit scores are a good predictor of future insurance claims. “That’s just a fact,” he says.

    Ask for data to back up that claim.

  • North Dakota Department of Insuance: Hearing Notice: Insurance Commissioner Jim Poolman will be conducting a public hearing to solicit opinions on the use of credit information in pricing and underwriting of insurance.
  • Plagiarism: Shhh. Be vewwy, vewwy quiet. We're hunting pwagiarists!

    Please copy that page onto your hard drive. Witnessess may be necessary.

    Subject: genius writer
    Date: Wed, 20 Mar 2002 07:10:54 -0500
    From: Greg Fisher
    To: timb@firstratefinancialgp.com

    Who wrote the first section of this page http://www.firstratefinancialgp.com/html/credit_repair.htm (the part ending with "Welcome to the Information Age. Welcome to Information Warfare.").

    He's a genius!

03/11/02 Updates
  • Fair, Isaac: Consumers Now Can Know What Loan Rate Offers to Expect Based on Their FICO Credit Score at MyFICO.com
    • "National Average Home Lending Rates (APR) by FICO® Score" - Shows 30-year fixed mortgage loan at 6.526% with 1.0 point at a score of 720-850.
    • Freddie Mac: Weekly Mortgage Market Surveys March 7, 2002-- "In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.87 percent, with an average 0.7 point, for the week ending March 8, 2002, up from 6.80 percent last week.
  • "Those who ignore history are doomed to repeat it."-- George Santayana
    • Fair, Isaac, 2001, regarding insurance: "A number in itself to be disclosed would not be helpful to a consumer."
    • Fair, Isaac, 1997, regarding lending: "... The score itself is not helpful to the consumer for several reasons..."
  • Channel 13, Indianapolis: "What's most frustrating, Gilliam said, is that she's never filed an insurance claim, and she hasn't had a traffic ticket in 14 years."
  • A Nebraska state agency: "The Nebraska Equal Opportunity Commission is interested in investigating insurance companies that use discriminatory policies and credit scoring systems that virtually guarantee insurance will be denied to urban neighborhoods and people of color."
  • In Florida
    • State Department of Insurance:
      • TASK FORCE ON INSURERS’ USE OF CREDIT REPORTS IN UNDERWRITING AUTOMOBILE AND HOMEOWNERS INSURANCE
      • “'Credit history, and credit and insurance scores, may be one way to analyze a particular policyholder,' (Commissioner) Gallagher said. 'But we need to make sure it is applied in a fair, non-discriminatory way.'"
    • Florida Insurance Council: DOI Task Force on Credit Scoring
  • 2-11-97 IBAA (congressional) Testimony - "Reliance on credit scoring methods will result in a credit cloning process that does not take individual circumstances into account."
      Witness credentials:
    • President, Interchange Financial Services Corporation (holding company of Interchange Bank)
    • Consumer Advisory Council, Federal Reserve Board
03/4/02 Updates
  • Allstate
  • In the California senate: "This bill would prohibit an insurer from using credit ratings, credit reports, credit scoring models, or credit information to underwrite, classify, or rate certain automobile and property insurance policies."
  • CREDIT SCORING IN UNDERWRITING AND RATING TO RECEIVE HEIGHTENED SCRUTINY BY INDIVIDUAL INSURANCE REGULATORS AND THE NAIC - "Representatives from Fair Issac and the Associated Credit Bureau testified that there was a demonstrable correlation between poor credit and insurance losses, a correlation that Bob Hunter had vehemently disputed."
  • Utah insurance commissioner: “It is common knowledge that credit reports are often inaccurate."
  • The Credit Scoring Paradox - By "Given recent media attention paid to the major credit agencies' data integrity problems, the growing prevalence of "ID theft," and the rigorous disclosure requirements mandated by new financial services legislation, insurers would benefit by explaining clearly how they will use credit information."
  • Professional Insurance Association of New Hampshire: "In fact, the company should be mandated to provide two reasons they take adverse action against a customer, rather than reasons the customer was assigned their particular credit score."
  • Chairman, task force, Professional Insurance Agents Association of Pennsylvania, Maryland and Delaware: "Unfortunately, as credit scoring use has become widespread in automobile and homeowners insurance, many deficiencies and questions have surfaced, including how credit scoring practices are regulated."
2/26/02 Updates
  • (The never-say-die) National Association of Independent Insurers (NAII) news releases:
    • "JUNEAU, Alaska — Two more bills prohibiting insurers from using credit-based insurance scores were introduced into the state legislature this week. Both apply only to auto insurance."
    • BOISE, Idaho — A state Senate committee approved Thursday (Feb. 21) a bill prohibiting insurers from charging a higher premium or deciding not to insure a person based primarily on his or her credit rating or history.
    • COLUMBUS, Ohio — Proposed legislation introduced Wednesday would impede Ohio insurers' use of credit-based insurance scores and charge the state's insurance department to study this widely-used underwriting practice.
    • INDIANAPOLIS, Ind. — Political maneuvering is keeping alive a burdensome and counterproductive bill that would require Indiana insurers to obtain prior approval of credit-based insurance score formulas and force a three-year review of credit history.
    • See Washington, New Hampshire, Kentucky, Missouri, etc.
    • DES PLAINES, Ill. — As of February 12, 2002, 21 states have introduced bills that would ban or restrict the use of credit-based insurance scoring.
  • Allstate Insurance - an answer for everything:

    What does credit have to do with my likelihood of having an insurance loss?
    The link between credit history and loss potential has been studied extensively by many scholars outside the insurance industry, in fields such as psychology, safety engineering, occupational medicine, consumer research, and risk perception.

    Nearly 30 articles and studies that we analyzed point to various possibilities...

    Ask for those studies.
  • Channel 2, Orlando: Credit Checks Present Risk To Ratings - "The sixth car dealer finally clued Mowery into why each offer continued to get persistently worse and worse."
2/23/02 Updates
  • WashPIRG: Opinion - Credit scoring highly unfair - "In fact, you could have paid every insurance bill you ever received on time and never filed an insurance claim, and you could still have a bad credit score that would either make you pay significantly more for insurance or prevent an insurance company from offering you insurance coverage."
  • Channel 7, Denver: Credit Score Could Affect Your Car Insurance - Check Your Credit Reports To Make Sure That All Information Is Accurate
  • (FICO vs. fake-o) CNN/Money: Five ways to improve your credit score - Feb. 15, 2002 - "Consumers may now get their FICO score or a comparable version of it from each of the bureaus... with TransUnion your score is automatically included in your report, whether you get it free or not."
  • CNN/Money: What's your credit score? Three steps to better credit [2 out of three, at least]
  • CNN/Money: (video) Your credit score - January 14, 2002 - "CNNfn's Valerie Morris has details on how that number is determined and how you can improve it."

    Valerie says, "Equifax, by the way, will send you your credit score for free if you've been denied credit within the last 60 days."

  • Experian Scorecard: "Score Simulator - access to our 'what if' tool for running scenarios on how changing financial behavior might affect your score."
  • Experian, Ask Max: "The National Risk Score is used by lenders across the nation. We have altered the scale to make it easier to compare to other well-known models."

    Let's "Ask Max": Max, how many lenders use it? Will you name 25?

  • E-Loan: "After being forced to abandon this effort by Fair Isaac, we successfully lobbied for legislation to allow California consumers to view their FICO® score and are working on similar national legislation."
2/21/02 Updates
  • "Georgia Insurance Commissioner John W. Oxendine has launched an investigation into the use of credit scoring by insurance companies, and has subpoenaed six insurance companies to appear at his office for a public hearing on October 17, 2001." Hearings transcripts.
  • "Washington State Insurance Commissioner Mike Kreidler has called for bold measures to limit the use of credit scoring by the insurance industry, saying the increasingly common practice is likely hurting consumers."
  • Florida Department of Insurance - Minutes of Task Force Public Meeting Held On October 30, 2001:

    "She contacted the insurer and was informed that the insurer had run a credit check on her, without her knowledge, that her premium was being increased as a result of the credit check, and that if she cleaned up her credit history her rates would go down."
    "The insurer refused to issue the policy, citing Mr. Goldberg's credit history. He went to another insurer and was able to obtain the insurance without any difficulty. He has recently had to change insurers because his agent is no longer appointed so he contacted Allstate again. Again, Allstate said it would not issue a policy to him because of bad credit. He stated he was given no information regarding the credit report and how he could obtain a copy of the report. He stated he did not authorize the insurer to use his credit report."
    "The premium went up $112 for a six month policy, with the same vehicle. He contacted the company and the company indicated that his credit history scores may be involved, and the company uses credit history to determine the rate increase. He stated his credit is excellent with no delinquencies and has had no driving infractions. He was advised that, even with good credit, he could still have a rating on his credit score that would lead to a higher rate."
    The Fair, Isaac representative "stated that an individual consumer could not independently gain access to his insurance score from Fair Isaac."
  • The Great Insurance Scoring Debate - "The practice has been in use for some years now, but the issue was dragged into the spotlight earlier this year with the release of “Breaking the Silence,” a study by Conning & Company that looks at auto insurers’ use of credit scores."
  • creditscoring.com again in academia: University of Nebraska at Omaha Department of Finance, Banking & Law Commercial Bank Management FNBK 3650-Fall 2001, Answers to Chapter Problems, Chapter 20
  • Loretta J. Mester, Federal Reserve Bank of Philadelphia and the University of Pennsylvania: "Check out the web site http://www.creditscoring.com/letters/equifax.htm for some interesting reading."
1/22/02 Updates
  • Privacy Commissioner of Canada:

    "I've heard a lot of the arguments about why credit scores should not be released to consumers. You might as well know that so far I'm not persuaded by them."

    "That is personal information. As such, consumers have a right of access to it under the act."

    "Yours is an industry that has received its share of criticism from consumer advocates and privacy people. This new legislation gives you a chance to get with the program."

  • insure.com: auto insurance - How your credit history affects your auto and home insurance premiums
  • Federal Reserve:
    • THE THIRD INSTALLMENT OF A FIVE-INSTALLMENT SERIES - "The purpose of the Federal Reserve System’s Mortgage Credit Partnership Credit Scoring Committee is to collect and publish perspectives on credit scoring in the mortgage underwriting process, specifically with respect to potential disparities between white and minority homebuyers."
    • THE FOURTH INSTALLMENT OF A FIVE-INSTALLMENT SERIES
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