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     | Monday, November 01, 1999 - 01:12 pm  Almost everyone knows the Fair Credit Reporting Act ("FCRA") gives someone the priviledge of seeing their credit report when they are turned down for credit. Unfortunately many times people are not turned down for credit but rather they are approved for a lower-quality of credit due to their risk-score falling below what the credit grantor considers to be optimum. I would be interested to hear from anyone how they feel the laws should work to protect those people who have imperfect credit but still are able to qualify for loans at inferior prices.
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| | Monday, November 01, 1999 - 03:42 pm Very simple: 1) Any derogatory entry is mailed to the consumer 30 days prior to adding it to the report. 2) Notification of every inquiry is mailed to the consumer. I don't just bitch about people/companies here and on the web site, I have the courtesy to notify them so they can respond. Why is that too much to ask for?
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| | Wednesday, November 03, 1999 - 07:32 am Mailing derogatory information prior to adding it to a report is overkill. Most every creditor or collection agency certainly makes many attempts to contact a person prior to reporting it to the credit bureau(s), which includes mailings and/or phone calls. Why should the credit bureau(s) be responsible for mailing something that you're more than likely already aware of? And if not, how do you expect the credit bureau to have a correct address if the creditor/collection agency doesn't? (they can access your credit file). Notification of every INQUIRY mailed to the consumer? No way. Each credit bureau updates anywhere between 15 and 13 MILLION records each DAY. Multiply that times 33 cents for mailing, and the bureaus would have a heck of a burden. Any consumer who is concerned about his or her credit files needs to be PROACTIVE, whether it's a credit monitoring service (which the consumer pays for) or simply by pulling copies of his/her report from each of the bureaus every 6 months or so. The credit bureaus are a business like any other. Business pay to report trade lines and business pay to access the information to make good decisions regarding credit extension. If the bureaus have to spend millions of dollars each day simply mailing out notifications, who is going to pay for that?
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| | Wednesday, November 03, 1999 - 11:01 am Proactive = slave labor. Exactly WHY do I need to be the credit bureaus' and the creditors' SLAVE? Is there anything in the constitution anywhere requiring that I have to work free of charge for ANYONE? FYI, it is absolutely NOT true that most consumers know about the derogatory information on their credit. YOU had a different experience, but there are millions of people who DID pay their bills ON TIME and they still have bad credit. That's because so much of it is INCORRECT. ** I ** should PAY for a service to monitor who illegally accesses my credit files? NO WAY! I found a solution to inquiries: I'm using different names, addresses. It's free and it's good to know I'm adding to their files :) One of these days I might just have one clean file with just a few credit card accounts, and hopefully all the garbage is going in the other files. I'm going camping in Gold Basin for a few days, Christine
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| | Wednesday, November 03, 1999 - 11:21 am One more thing: Rbielak states: "Multiply that times 33 cents for mailing, and the bureaus would have a heck of a burden." If 33 cent is a burden to a credit bureau, what do you call the $8 plus 33 cents for mailing that the consumer has to pay to get just ONE credit report ONCE? ($8.33 x 3 x 12 x the number of people in the US) + (the number of people in the US x 1 hour labor x 12) Could somebody tell me how many people we got here so I can calculate this figure? And what's YOUR hour worth? And all this just to find out who slandered us last month ... we haven't even started to dispute.
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| | Wednesday, November 03, 1999 - 02:46 pm Perhaps it would be a good business practice for Credit Reporting Agencies ("CRAs") to notify the consumer when negative information is first reported on their report along with an offer that they can receive a copy of their credit report for $8.00. I wonder why more do not do that? Perhaps they do not make any profit off of the $8.00 fee, but who can say?
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| | Saturday, November 06, 1999 - 08:54 pm Christine, I wrote an editorial link on credit reporting at bnkalternatives.com and would appreciate your input. It's too long and would probably be rude to reproduce it here. I ask for the input because I'm in a position where people are always asking me for credit advice, and I'm always looking for enlightenment to pass on these people. Approximately 6 months ago I read your statement that you've never met an attorney who understands credit. I concede the point and am trying to learn.
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| | Tuesday, November 09, 1999 - 03:28 am Knowing PIRG'S research and other studies have uncovered the enormous amount of proven inaccurate credit reporting taking place(APPROXIMATELY 1/3 of consumer reports contain damaging,inaccurate information) and Fair Isaac admits that inaccurate credit reporting drastically effects the credit score itself, how can "credit scoring", when weighed so heavily on by lenders, be an effective means of evaluating a credit history if based on false, derogatory information? If a consumer has no knowledge of their score,no knowledge of what the deliniated formula is when compiling the score, no knowledge to what extent the inaccurate information played in the results of the score, no knowledge of the formula to increase their score... aren't we just left in the dark to trust whatever the lender tells us is our score and more importantly what interest rate we are afforded based on this mysterious score? Where are the checks and balances to ensure we are not paying higher interest rates due to either an inaccurate score an over zealous lender that tells us we are not entitled to a lower interest rate based on an erroneous score they want to represent to us? Without the known EXACT formula utilized we can never be assured we are scored truthfully or accurately. I strongly believe that the FCRA needs to provide for HEFTY fines against FURNISHERS of information who continue to report inaccurate information to the CRA's. The loophole that gives us the right to sue the bureaus but bars us from suing the furnishers "except in certain circumstances" is a door that needs to be slammed shut on the creditors. Go to http://www.consumeraid.org/unfair.htm to see WHY!
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| | Tuesday, November 09, 1999 - 07:37 am I completely disagree. Credit scoring is statistically validated. You may not like it if you have inaccurate information on your report but it doesn't change the fact that scoring identifies groups of borrowers that will pay acceptably. It's both cheaper and more accurate that traditional underwriting. http://www.creditinfocenter.com/discus/messages/46/54.html?ThursdayNovember419990253pm
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| | Wednesday, November 10, 1999 - 09:02 am I've always read that 25% of credit reports have inaccurate information, but that could mean something as minor as a mispelled name or SSN typo. I have to agree with Sean, because FICO claims that their statistical formulas are based on algorithyms derived from actual empirical data. And unfortunately FICO seems to work. And the reasoning behind the factors they consider makes sense. A 1996 study compared banks that make conventional loans (and therefore rely on other criteria besides FICO scores, such as income/debt ratios and collateralization) to banks that issued credit cards (and rely exclusively on FICO scoring). Guess which banks made more money. Of course, that could be because of the usurious interest rates. The banks which have to rely on FICO scoring to monitor consumers and to prequalify - they seem to know when to refuse new credit and when to terminate existing credit. I hate credit scoring, but it seems to work. If I were a lender-of-credit I would want a quick way to determine who was a good risk. So the idea of scoring is fair - it's only unfair (my opinion)that we are not advised every time something brings the score down.
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| | Wednesday, November 10, 1999 - 01:05 pm I am looking for the correct dates and legal citation of an issue regarding FICO scoring. I was told that as of 1998 (?), a consumer now has a 30-day window when applying for a mortgage or auto loan in which they can shop around at different lenders and not be penalized for multiple credit inquiries. In the past, the conventional wisdom was that every credit inquiry reduced a FICO score by as much as 10 points. Can anyone provide more details on this?
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| | Wednesday, November 10, 1999 - 05:12 pm A link I cannot provide you, but I can provide you with this information: According to Fair, Isaac written documentation they indicate that auto or mortgage inquiries that occur within 14 days of one another are treated as one inquiry. Also any auto or mortgage inquiries made within the past 30 days are ignored for the purpose of the scoring. HOWEVER I recommend that you never trust a company to properly code its inquiry. I have had mortgage inquiries show as from a Utility Company.
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| | Wednesday, November 10, 1999 - 07:28 pm http://www.fairisaac.com/servlet/SiteDriver/Content/927#19 http://www.namb.org/press/creditrl.htm
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| | Thursday, November 11, 1999 - 08:04 pm Sean, Statistics show that people who complain about inaccurate reporting and want to know how their scores were derived are deadbeat losers who can't accept reality (I can not show those statistics here because it's proprietary information). Statistics never lie and they're impossible to manipulate to fit a certain agenda, so whenever someone says they have statistics, b'gosh you better believe every word they say and don't ask no questions, neither!
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| | Friday, November 12, 1999 - 06:03 am Barbara, you are truly the real dead beat loser!! Statistics are always based on a study of a group of people, not a whole. And with things changing as fast as they always do nothing including statistics never is the same from one second to the next, plus people are biased in opinions and ways of reporting. So maybe you do not care what people say about you even if it destroys you but the other billion people do and they should.!!!!
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| | Friday, November 12, 1999 - 09:45 am I took statistics as a core class in college, and my professor was the first to acknowledge that statistical conclusions can be be manipulated. I recall that it depends a lot on the sample size (called "n"). And I am curious, if statistics never lie, then why was it necessary for Fair Isaacs to modify their credit scoring software to ignore mtg/auto related inquiries within 30 before a report, and to count all mtg/auto related inquiries within a 14 day period as one? FICO did not always consider those inquiry groupings. FICO had to adjust when the inaccuracy of their credit scoring model became apparent. I'm sure that it isn't the only modification that FICO has made. If FICO were static and unchanging with their models then they would no longer corner the market. Some other software company would come out with a model that was a more accurate predictor, and not even that model would be perfect. As for your statement that statistically people who complaint about inaccurate information are all deadbeats: I doubt it. Who would pay for such a statistical study and what would be the purpose? At least if 9 out of 10 dentists stranded on a desert island prefer Colgate, then I might buy the product. I can't see anybody with a white labcoat and pocket-protector doing such a study, because it can't be done. How would a statistical study define "deadbeats"? You can't combine statistics and opinion-based terms like "deadbeat". Could you imagine some little girl telling you that 62.5% of boys are "poo-poo heads"? And your statement is counterintuitive. Only deadbeats care if INACCURATE information hurts their credit???? That's akin to saying that only deadbeats care about credit. Do people who aren't "deadbeats" like inaccurate info about them? I don't owe a penny to anyone but I would really rather not have INACCURATE information about me anywhere. This is a truly informative forum and I am learning a lot. Your statement is purely inflammatory and not educational at all. It's almost as if you're trying to provoke people.
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| | Friday, November 12, 1999 - 11:38 am FICO scores are statistically valid and making changes in the risk models don't change the fact that it was statistically valid before. Originally Fair Isaac had just one score card, but the way that score card worked pretty much if you had any kind of past delinquency at all you wouldn't be qualified for a loan. At last count Fair Isaac had 10 different score cards to handle a variety of different possibilities ranging from people with no delinquencies, to people with bankruptcies, to people with new credit, to people with serious derogatory information. This is an attempt to comb through the people with some negative history and find the diamond in the rough. Maybe before on the FICO scorecard everyone lost 10 points per inquiry and maybe now they lose 12 points per inquiry but specific types of inquiries (like those mentioned above) are ignored. Some people are helped by the change (because some of their inquiries no longer matter) and the rest are harmed (because now inquiries cost more to have). Risk scoring is a zero-sum paradigm. There's a certain amount of statistical risk out there and it has to be assigned to some group of people. No group can benefit except at the cost of another group. That's the way it works. Everyone cares about credit reporting accuracy. All I'm saying is the lack of accuracy is not Fair Isaac's fault, nor does the lack of accuracy prevent their risk models from forming groups with specific statistical risks. Experian admits that fifty percent of all credit files have some kind of inaccuracy on them. My Experian report has an inaccuracy on it. Fortunately for me it's not harmful so I'm not scrambling to correct it.
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| | Friday, November 12, 1999 - 01:35 pm Who validated credit scoring (besides those who wrote the formula)?
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| | Friday, November 12, 1999 - 02:13 pm For mortgages the scoring process has been validated by Freddie Mac (http://www.freddiemac.com/corporate/creditscore/creditsc.htm#3). They include a nice chart with foreclosure rates vs. FICO scores. Since there is no fiduciary or pecuniary relationship between Fair, Isaac & Company, Inc. and it seems pretty unlikely that Freddie Mac would lie about it. Company ownership can be checked from Edgar Online and confirms that no one person owns more than 5 percent of Fair Isaac & Company (NYSE: FIC) (http://www.edgar-online.com/bin/edgardoc/DocFrame.pl?doc=A-814547-0000315066-99-000407&fmt=&nad=&nav=1&x=45&y=14) Both Fannie Mae and Freddie Mac are exempt from SEC disclosure.
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| | Friday, November 12, 1999 - 03:41 pm The chart to which you refer is derived from a Freddie Mac report in which they use a study by the Federal Reserve. http://www.freddiemac.com/corporate/reports/moseley/chap3.htm#cbs The Fed people used something they got from Equifax called "The Mortgage Score" (TMS). Quoting from the report: "The sample contains virtually all of the mortgages that were outstanding and whose payments were current as of September, 1994 at three of the largest lenders in the country." Indeed, they continue: "The sample is not, however, necessarily representative of the pool of borrowers nationwide; these lenders, do not, for example, participate in all markets, nor do they offer all types of mortgages." Later, they state, "TMS was developed by Equifax on the basis of the credit records of mortgagors and the payment performance on their mortgage accounts." Just mortgage histories. One bureau. Three lenders. In the transcript of the July 1999 FTC Credit Scoring Forum, the representative from the Federal Reserve said, "I don't think I said that we evaluate credit scoring systems per se... This was not an exhaustive study of each factor in a given scoring system and a relationship." http://www.creditscoring.com/pages/forumtranscript.htm#page240
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| | Saturday, November 13, 1999 - 09:50 am I was using sarcasm to make a statement about statistics: Just because someone says that they have "statistics" does not mean that their assertions are valid and does not mean that everything they say should be accepted without question. The main argument presented by people who want us to trust the credit scoring system is that the system's validity is proven by statistics. Why should we trust statistics that are produced by companies that stand to profit if the results go a certain way? Statistics can be manipulated. Why should we believe assertions for which the alleged evidence is shielded from scrutiny because it is regarded as "proprietary information". I think it is wrong that a person's character and integrity is judged by a secret formula that is not monitored by any regulatory agencies. I think it is wrong that a dubiously concocted number determines whether a lender, insurance company, or employer will say "yes" or "no". If a person pays all of his bills on time BUT lives in an "undesirable" zip code, doesn't have a college degree, works in a factory, doesn't use credit cards, borrowed from a finance company, moved six months ago, and applied for a job, an apartment, utilities, cable, phone, and insurance within the last year-- his credit score will label him as a "bad risk". I don't think that is fair. The "statistics" that are so often cited to convince people that credit scoring is fair have failed to convince me. Unverifiable "evidence" does not prove anything.
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| | Saturday, November 13, 1999 - 12:17 pm Barbara, sorry if I misunderstood the sarcasm, but I honestly still don't see it when I read that post. Too subtle. I think that everyone hates credit scoring, because who can like something that they have zero control over, but which can radically affect their lives. But on the other hand, what is the option? I am pro-Debtor by profession and I don't see a choice. How else can lenders decide when to refuse credit, how to set risk-based interest rates, and when to put a ceiling on future credit? They can't exactly interview every person applying for credit and review documentation at that interview. It's impracticable. I want to understand how the model is calculated also. But that is only because I want to tell people how to manipulate the model to improve their credit. Honestly, isn't that what everybody wants? Should FICO help me manipulate their model by revealing the formulas underlying it. Then the model REALLY would not be an accurate predictor. It would be skewed by the people who understood the model. The model may stink, but I suspect that if there was a better model, the commercial lenders would gravitate towards it. I also hate the fact that the burden is upon the consumers to correct inaccuracies. But who else is going to be aware that they are inaccuracies, and who else would have motivation to fix it?
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| | Saturday, November 13, 1999 - 12:59 pm I don't understand the point that if people knew how credit scores are formulated, then they would somehow be able to "cheat" the system and boost their scores.
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| | Sunday, November 14, 1999 - 08:34 am Greg: Your point being? Ok, the review was not exhaustive, but SCORING DOES WORK. People with low scores default more than people with high scores. Barbara: You're out to lunch. Your claim of "why should we trust statistics that are produced by companies that stand to profit if the results go a certain way" is absurd. Fannie Mae, Freddie Mac and the Federal Reserve all stand to gain by pretending scoring is valid even if really it isn't? While you, who probably hasn't looked at even 10 credit profiles plus scores and can't keep track of what's in or isn't in the model are the authoritative word on the unfairness of scoring? Voigtkampff: Actually, I love scoring. When I used to apply for loans I would have to dress up in a suit and tie and go in with my hat in my hand and try to convince some underwriter that I was sufficiently professional and conservative to get a loan. Somehow that never worked well and it was humiliating to boot. Now I just walk in with jeans & a T-shirt and say, "I've 18 inquiries on my profile and a 615 Beacon score. What can you do for me?" They then tell me my score is a little on the low side, but they'll be glad to give me credit as a sub-prime rate. I love credit scoring. I love that lending is no longer about the person deciding if they'll give you a loan or not and looking at your credit profile to justify their decision. I love credit scoring because it's fair. Most of the people who hate credit scoring are hypocrites. If they suddenly had an 800 FICO score they'd love scoring. I love scoring even though my score sucks. At least I know I'm being judged by the same yardstick as everyone else.
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| | Sunday, November 14, 1999 - 10:34 am Sean. I've been clear that I support scoring because if I were a creditor, I would use it and I would need it. So it would be hypocritical for me to suggest doing away with it. But just because it is the best solution available now does not mean that it doesn't suck. There is much room for improvement. I hate it because of the inaccuracies. The percentage of reports that have inaccurate info is acceptable. The average consumer's knowledge of their inaccuracies is unacceptable. The difficulty is correcting known inaccuracies is unacceptable. Can you disagree with me on that? An odd analogy, but I compare the interpersonal social system to the credit system. MOST people don't have time to REALLY get to know every person they meet, to decide if they're worth dating or even knowing. Pre-judgments are made based on age, occupation, attire or other visible behavior patterns. These pre-judgments are statistically validated empirically through our prior experiences. But are they 100% accurate or fair to the individual? No but people will keep pre-judging. Can we criticize lenders for doing the same thing? In response to Barbara's query about manipulating the system: If I know that a certain job, a certain political statement, attire, or car will make it more likely that I can meet someone, I can use my knowledge of that criteria. The dating scene here in South Florida exemplifies that. Women that I meet tell me how much they disapprove of the lazy, promiscuous, material-minded girls here. But they all say that!!! By the same token, if I know what a lender wants to hear, I'll say it. Or rather show it. If I know that the ideal credit score can be achieved by having X credit cards, with Y balances because they have a Z ratio to the credit limit, then I can manipulate the system. I always pick the brains of loan officers to ask what they want to see. I pass that information on to clients and they change their spending AND payment habits accordingly. People even file bankruptcy to influence debt/income ratios. Consumers often do something artificial because of how the scoring system will perceive it. Isn't that cheating the system?
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| | Sunday, November 14, 1999 - 10:53 am Sean: The point is that you can't believe everything you read. You said, "For mortgages the scoring process has been validated by Freddie Mac (http://www.freddiemac.com/corporate/creditscore/creditsc.htm#3). They include a nice chart with foreclosure rates vs. FICO scores." Did you read the Federal Reserve Report Freddie Mac quoted? Where does it say they used FICO scores?
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| | Monday, November 15, 1999 - 08:12 am Voigtkampff: I think the question that's not being asked or even answered is this: Are the "right answers" on the credit profiles merely indicators of risk or will changing your behavior to produce the "right answers" actually reduce your risk? If you pay down your credit cards are you just "pretending" to be low risk or have you actually lowered your risk? My personal opinion is the latter. Greg: I do not agree that the Federal Reserve Study and the FreddieMac study are one and the same. One study says it considered "The Mortgage Score" vs. 30-day delinquencies and the other says it considered FICO scores vs. foreclosure. The sources quoted are different on both. Just because the charts look similar doesn't mean the studies were identical.
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| | Monday, November 15, 1999 - 11:59 am Sean, when a consumer changes his/her behavior to produce the "right answers", it does not actually reduce the risk to lenders, it just tells the scoring model what it wants to hear. That's the point. That is why I understand FICO's refusal to expose the guts of their scoring model. There is no disagreement here. You say that when a consumer pays down his credit cards he is not just "pretending" to improve his credit score, he is ACTUALLY lowering his risk. Of course. But loan officers tell me NOT to have my clients pay off their low balance credit cards. Instead I am repeatedly advised to tell clients to MAKE PURCHASES and maintain balances, albeit small ones, and to pay them over time rather than pay them off!! That seems contrary to common sense, but improves the FICO. How about having someone with good credit put your name as an authorized user of their account? Harmless enough, but engineered to manipulate the FICO. How about closing accounts that are not being used, but that might have been used at some point in the distant future. That's inconvenient, but helpful to the FICO score. There are many examples where a consumer's behavior can be manipulated to improve their credit, where they are ONLY "pretending". They are not ACTUALLY lowering risk. In fact, when I tell people NOT to pay off their cards, I feel that I am actually INCREASING risk while pretending. I am assuming that FICO would rather people not pretend, and that this motivates their decision to keep so much information proprietary.
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| | Monday, November 15, 1999 - 02:09 pm Well, some of your suggestions benefit a person's score, some of the things harm the score and some of the things I have no idea if they help or hurt the score. We do know, however, that mortgage brokers have a nasty history of telling people to do things that actually result in harm to their scores based on their own (very flawed) ideas of what makes a person a good credit risk. For example (http://www.fairisaac.com/servlet/SiteDriver/Content/718) a mortgage broker advised a couple to close many open accounts based on the theory that their scores were harmed by too much available credit. The results were disasterous. Therefore I would say the given advice to "close cards being unused but which might have been used in the future" is pretty questionable advice that may result in serious harm to a borrower's score by throwing their balance to limit ratios off. Also the suggestion to keep every account with a small balance (see Beacon and FICO II denial code 05: "Too many accounts with balances.") may also result in harm to their credit score. I think the risk models are more resistant to being manipulated than you might think, that the advice given is not as good as it seems and that what is good advice for one borrower may be catastrophic for another.
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| | Monday, November 15, 1999 - 04:32 pm I got some of the advice from the actual webpage for Experian (or one of the others), so I trust it. It did warn that closing accounts all of a sudden would look bad on the report. I guess that you can't be obvious about manipulating. As far as "too many accounts" with balances, I have not been avised to tell people to keep all or even many accounts with balances. But I have been told to keep a few with small balances running, rather than pay off the accounts. It seems odd to me as well. Consensual validation may not equal truth, but I have heard this too often to ignore it. You may be right that the advice is not as good as it seems. I don't know. But it is still somewhat good, and you seem to acknowledge that. You state that some help, some hurt, and some are unknown. If we conservatively took only the advice that we agree can help credit, that advice evidences that people can manipulate the FICO system. And to me that proves that FICO will NEVER EVER reveal the guts of their scoring model. Because that would make it easier and easier to manipulate. So we're left to guess. Christine (Admin) made a recent reference to people being "blind" to how the system disadvantages them. Isn't this sort of true? You know more than most people, and wouldn't that guide you around certain pitfalls, away from doing things that you know would hurt your credit? I mean, are you going to offer to co-sign on someone's mortgage or car loan, when it might be added to your debt/income ratio for mortgage loan purposes? Many people would for a friend or relative. Out of goodness. But also out of blindness. You can't really believe that the FICO score predicts YOUR credit risk as accurately as it predicts the credit risk for someone who does not know what FICO considers. Honestly and without offense, if you use that definition, don't you manipulate the system by what you choose to avoid? Doesn't make you a bad person. But it might make FICO a little unfair.
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| | Tuesday, November 16, 1999 - 04:52 am One more time, Sean: Freddie Mac stated, "Analyzing other data, researchers from the Federal Reserve Board reached a similar conclusion. (See Credit Scores: The View from the Federal Reserve) In a comprehensive evaluation of the relationship between credit-bureau scores and mortgage performance, they concluded: The data consistently show that credit scores are useful in gauging the relative levels of risk posed by both prospective mortgage borrowers and those with existing mortgages." Key words: "relationship between credit-bureau scores and mortgage performance". http://www.freddiemac.com/corporate/reports/moseley/chap3.htm Fair, Isaac's calls FICO scores "credit bureau risk scores" at http://www.fairisaac.com/servlet/SiteDriver/Content/198 And Freddie Mac is still talking about this research about "TMS." See http://www.creditscoring.com/pages/forumtranscript.htm#page84 Freddie Mac says, "comprehensive," but the Federal Reserve says, "not an exhaustive study" and not "necessarily representative." You didn't answer my question: "Did you read the Federal Reserve Report Freddie Mac quoted?"
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| | Tuesday, November 16, 1999 - 10:45 am voigtkampff: Well one thing is for certain. If you can get other people to add you as authorized user, co-signer or co-maker and they maintain that debt more responsibly than you would under the same circumstances that will definitely increase your score as well as fooling traditional underwriting. Now that I know about credit and scoring I push aggressively for limit increases on my credit cards to try to keep my debt to limit ratio good and I delay my applications for new credit to coincide with my inquiry counts. Therefore I would suppose that my knowledge of credit scoring permits me, to a certain extent, to "manipulate" my credit score to a certain extent. On the other hand I would argue that informing myself on credit and credit issues has made me a better risk in ways that take time to find their way into my credit profile. I know that some lenders have determined that their customers that accept their pamphlets on home ownership default less on the loans. To me this means that foreclosure can be prevented in some cases by educating your borrowers. Greg: No, I sure haven't read that Federal Reserve Report you're referring to. Please give me information on how I could get that. I'm interested. I have, however, read all your links and the entire transcripts of the FTC meeting on your site. I think you're stretching and trying to read into it something that may or may not be there. I do not agree that the Freddie Mac information is just a regurgitation of Federal Reserve information. See the quote from your own link: "Freddie Mac research has shown that borrowers with strong credit profiles are significantly less likely to default on their mortgages. Based on our 1994 purchases, for example, Exhibit 5 shows that borrowers possessing weak credit profiles, defined as FICO scores under 620, were 18 times more likely to enter foreclosure than borrowers with FICO scores above 660. "Analyzing other data, researchers from the Federal Reserve Board reached a similar conclusion." (emphasis added http://www.freddiemac.com/corporate/reports/moseley/chap3.htm) "Credit scoring has not been independently validated. That is not an accurate statement." (emphasis added http://www.creditscoring.com/pages/forumtranscript.htm#page84) "...the Fed did undertake an analysis of credit scoring systems in the sense of trying to determine whether or not there were solid correlations between low scores and poor performance. And generally they found that there were. That credit scoring systems do tend to be predictive of behavior . . . "This was not an exhaustive study of each factor in a given scoring system..." (emphasis added http://www.creditscoring.com/pages/forumtranscript.htm#page241)
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| | Tuesday, November 16, 1999 - 12:29 pm Sean-- But you do believe that these scores should be easier to get and see as a consumer? It seems ridiculous to me that I had to go to a site and pay 50 bucks for a merged report that included my scores. It put an inquiry on the report, thus lowering my score and I had to pay twice what I would have had to pay had I just ordered them directly from the bureaus. As you pointed out, it is all about the scores. I don't care what's on my credit report, I care what my score is. That's what determines my ability to get credit. If it didn't, there wouldn't be same day approvals or instant approvals via the internet.
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| | Tuesday, November 16, 1999 - 01:52 pm I do not believe scores should be disclosed in writing to consumers. I have no problems with scores being disclosed verbally. I fear that someone who gets his or her credit report with the score intact can use that document to go to various places and apply for credit without adding additional inquiries. This practice would eventually result in Fair Isaac needing to recaliberate the model and would punish those who did not indiscriminately apply for credit. I believe people should be able to get their credit report and clearly understand it including full disclosure of everything on it that results in harm to the consumer's reputation. Unfortuantely most credit reporting agencies merely point up the delinquencies you have and leave it at that. A high balance to limit ratio, a large number of inquiries and the existance of consumer finance accounts should be similarly highlighted. I believe that when a person gets their credit profile it should come with one or more reasons why the person's credit might not be up to various lender's standards.
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| | Tuesday, November 16, 1999 - 03:35 pm Sean: What am I trying to read into it? Perhaps we can use the Voight-Kampff machine to verify its veracity.
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| | Wednesday, November 17, 1999 - 08:41 am I think you're trying to read into it that no one has done any checking on the scores at all or that what checking has been done has been slapdash. You have a frequent tendancy to quote out of context. For example should someone say, "Scores have not been evaluated by us for racial bias..." you'll just throw in a quote saying "Scores have not been evaluated..." Here's a case in point: http://creditscoring.com/ You quote MBA saying "Blacks get lower FICO scores..." with a conveniently broken link to where this source comes from. Undaunted I tracked down the original source of the quote: (http://www.mbaa.org/consumer/col/guttentag/990102.html) in which the author says many other things you didn't bother to include: "The FICO credit score is an objective measure of the likelihood that a loan made to a person today will be repaid on time." "The point is well taken, but I don't think the answer is to attack credit-scoring." "...underwriters may take account of a variety of factors, including special circumstance that may have affected the credit score. Indeed, as a larger part of their job has become automated, underwriters can and do give increasing attention to special circumstances." (emphasis added) "It took much too long for the US to get to a system that was fair ... and now that we have it, we don't like all the consequences." (emphasis added) Tell me, Greg -- what's the purpose of your site? Is it merely to inform people about credit scoring or is it to pretend to inform while really trying to lead them to hate it like you do? Why when positive information becomes available about credit scoring is it either conveniently absent or mis-quoted in such a way to make it seem that those in favor of credit scoring are actually opposed to it?
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| | Wednesday, November 17, 1999 - 02:01 pm Sean: This is too easy. I will remind of your reference to me as a "jerk" (without informing me of your attack) before the old Bayhouse forum was erased, so your comments come with your baggage. And you expect me to tell you how to get the Federal Reserve report. Get real. I'll correct the link that you accuse me of "conveniently" breaking. If I am not mistaken, you are referring to the home page of creditscoring.com. I take offense to your attack: your insinuation that I purposely, dauntingly, led the reader to a dead end just to avoid them getting the whole story for themselves. But, keep pointing out HTML errors and dead links. It is always good to have more help. You gave an "example" that "should someone say, 'Scores have not been evaluated by us for racial bias...' you'll (I'll) just throw in a quote saying 'Scores have not been evaluated...'." Where is that? Here's what I published on the site at http://creditscoring.com/pages/forumtranscript.htm. "MS. WELSH: Hi. Kristy Welsh, K-R-I-S-T-Y, W-E-L-S-H, and I'm with creditinforcenter.com. And I had a question about what Mr. Cook said, that the Federal Reserve Board regulates or somehow evaluates the FICO scoring. How is this done? How is it tested? Are we going through a statistical analysis? Do we take case A, B, C and B and run them through the scoring? Hey, we know for sure that it matches what it should match. And if so --I mean, you said that this was done. Is this published anywhere? Can we get a copy of it? MR. COOK: Well, I may have mis-spoke. I don't think I said that we evaluate credit scoring systems per se. I will say that HUD has currently embarked on a study of the scoring systems of the GSE's --Fannie and Freddie. No. I do --I can tell you that in 1996 --and, Bob can correct me if I'm wrong, if he's still here --the Fed did undertake an analysis of credit scoring systems in the sense of trying to determine whether or not there were solid correlations between low scores and poor performance. And generally they found that there were. That credit scoring systems do tend to be predictive of behavior. But that leaves a lot of room, I think, for issues today. MS. WELSH: Right. So they haven't been evaluated for bias or discrimination or any of these kinds of things? MR. COOK: No. This was not an exhaustive study of each factor in a given scoring system and a relationship. I guess one of the questions that I didn't quite follow up on with Pete, you stated that the statistics are available for your clients to understand and appreciate the various risks associated with each of the factors, so that if they're called upon to justify the inclusion of a particular factor, it's predictiveness can be quantified for them based on the statistics that you've done. But let me ask you this, sort of a further question. Recognizing --sort of taking off on Debby's approach --that we're talking perhaps more than just the legal requirements here. obligation to do the rest of the analysis, to do the third stage of a --what did we call it --disparate impact analysis, that while there may be a justification for using something like finance companies --a number of finance companies --is that the least --does it produce the lowest impact, or is there another set of factors that you could have used that would produce a lesser impact?" Of course, on the same page, is the entire transcript of the entire day of discussion. I don't see a link to it on Fair, Isaac's site. Not one on Fannie Mae's, Freddie Mac's, the credit reporting agencies, nor their association. Gee Sean, where did that get us besides me cutting and pasting previously posted material? We had better call NBC and tell them to stop using 10 second sound bites because they're taking them out of context! Oh, no! For those of you skeptical of posts from anonymous sources (like anonymous255@yahoo.com), use the hyperlink to the source documents-- a fundamental hallmark function of the Internet giving the referring document complete, reliable, credible, ultimate footnotes-- and your browser's Find (Edit, Find, or CNTRL+F) function with the string "scor" or other words to prove it to yourself. Sean, your tactics are all too typical: when the message is loud and clear, attack the messenger. And stay anonymous-- that way if you make wild statements, you can always change your identity. I won't respond directly to your leading question about me hating the practice because you only gave me two choices. Oooh, clever. Right out of the salesman's bag of tricks. I don't have enough information to hate it or not. My emotion for it, or lack thereof will have to remain a mystery to you for now. The purpose of creditscoring.com is self-evident and I pull no punches in making my view clear: Give me my score so I can, at least, tell if my credit is getting better or worse; and (to prove that even those collecting money by selling the score don't even know how it works), I asked the heretofore unanswered question regarding the right number of credit cards to have to avoid that factor lowering a score. The credit reporting agencies can say "too few" or "too many," but they can't tell you the right number. What kind of slapdash claptrap is that? Why "when positive information becomes available about credit scoring is it either conveniently absent or mis-quoted in such a way to make it seem that those in favor of credit scoring are actually opposed to it"? Name it, and knock off your generalities. The home page says, "Now available: FREE WEB SPACE for the national credit bureaus to explain credit scoring. Concerned industry leaders! Use the most memorable web address for the job: creditscoring.com. No charge!" Should I buy billboard space and television time, too? I already answered your question about giving both sides of the argument when you asked it months ago. Complete objectivity is as much undesirable as it is impossible. Whoever said that's the idea? Where do you get the idea that I'm not supposed to have a viewpoint? And I'm only pretending to inform? I make fun of the other side on practically every page. I'm going to have to work on that some more, because you didn't get it (or did you, and you're just trying to work the audience here?). The more this issue is discussed, the closer it gets to critical mass of public understanding (exactly the opposite of what the opposition wants) and changes are bound to come. Bills in Congress, a letter from a senator and presidential candidate to the FTC, a hotseat forum at the FTC, HUD breathing down their necks, endless questions from consumers, the media hyping it all over the place-- I couldn't have MADE UP a better story. You have called me a name and attacked my integrity. Try your rhetoric and clairvoyance on someone else. You have no idea what my motivation is. creditscoring.com is only the warm-up. This isn't a one-act play.
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| | Wednesday, November 17, 1999 - 04:30 pm Sean, you stated that I can't keep track of what's in or isn't in the scoring model. Please provide some support for that statement.
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| | Wednesday, November 17, 1999 - 05:43 pm Sean, don't think that I'm favoring Greg just because of his recent Bladerunner replicant reference (in fact he may have been picking on my screen name). But what is motivating you? I understand playing devil's advocate. I spend as much time agreeing with you as I do agreeing with Greg and Barabara. But you sound like a stockholder in Fair Isaacs, Inc. I follow all of your posts because you obviously know more than I do, and I just want to learn. However, you lose credibility with the extremist positions and your refusal to ever concede an inch of ground. Speaking as a member of the audience and not an actual participant in these proceedings, we would learn more from you if the discussions were more factual and less inflammatory. You make sense. But so do Greg and Barbara. As a polite suggestion, wouldn't it be nice if, instead of ignoring the arguments that you are losing (it happens) you concede the point and hammer at the arguments that you are winning (it also happens). Maybe I don't know the whole history, but from the audience's perspective, you don't seem to be the moderate. Apologetically. VK
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| | Thursday, November 18, 1999 - 02:34 pm voigtkampff: I have a limited amount of time everyday to respond to the posts of people and I'm not a radical like Greg to purchase a whole site for the purpose of flaming Fair, Isaac and the whole scoring process. I originally visited Greg's site (a person who, supposedly, devotes a significant portion of his time to researching scores and creating this site) and I was astounded at the things I saw there. The first thing I noticed was his long conversation with Trans Union (http://creditscoring.com/letters/tu.htm) in which he demanded to know the correct number of revolving accounts. Had he done a little research he would've realized that the Trans Union model doesn't include the number of revolving accounts as part of its model (this is because Trans Union is the weakest of the three credit bureaus with the least market share and the least amount of consumer information). If you haven't already read the letter yourself go ahead and read it. Is it just me or is this guy amazingly obnoxious? But anyways you asked about my motivation. I, like many people on the Internet, am a devout libertarian. I view the Bayhouse site, the CreditInfoCenter site and the other sites on the anti-credit-scoring ring to be launching grounds for increased government regulation of this sector of the economy. Government regulation costs consumers BILLIONS of dollars yearly in the unnecessary added costs for firms to retain lawyers and compliance specialists to handle the regulation. The last thing I want is billions more lumped onto me by people who "just want to protect me (from myself)." Do you want to understand where I come from and what my motivation is? Read these articles: http://www.jewishworldreview.com/cols/sowell051099.asp http://www.jewishworldreview.com/cols/sowell092099.asp http://www.jewishworldreview.com/cols/sowell101599.asp ...as a primer for where I'm coming from. Let's cut to the chase. Black people (as a group) score lower than white people (as a group) because the black group is more likely to default on their loans. I'm sorry if that sounds racist or offensive to some people but it's the truth and the last thing FICO scores need is some kind of "racial norming" algorithm mandated by the FTC because it's "fair." Screw "fairness" I'm just interested in an accurate scoring mechanism even if it accurately portrays me as the 80+ mph, 18-inquiry, 35% of credit limit available high-risk kind of guy.
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| | Thursday, November 18, 1999 - 08:28 pm Sean, I read the primers. All of it. Thanks for the headache. I still read comic books when I can, so understand if I don't yet see the relationship between economic fascism and this topic. I got the other other 2 articles. I never thought about the costs of regulating the use of credit reporting or other government intervention. But attorneys have to eat too. As a quick answer, couldn't the costs be imposed on the credit reporting agencies rather than on the government and therefore the consumers? You suggested that consumers be notified whenever negative information was reported on them. I like that. If the FTC took a more active role against parties who failed to inform consumers of new negative info, or who failed to immediately correct inaccurate infomration, the FTC itself could be funded by fines imposed on misbehaving creditors or credit reporting bureaus. It sounds like too simple a solution, but what is wrong with it. I agree with you on fairness and racial norming. (I didn't know that such a thing was even suggested.) But what about accuracy and information. But couldn't we force the CRAs to behave and place the costs back on them?
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| | Thursday, November 18, 1999 - 10:11 pm HO-LY COW!... er, ulp, I really mean that in the most non-religious way-- like, uh, like... HARRY CARRY! What a cliff-hangeroonie, eh? Before getting to the answer to Sean's latest bombast, how about some more about POLITICS AND RELIGION? A devout libertarian-- what, do they get on their knees in the voting booth? Limited time to respond? Now here's a hoot. It's 3 cents worth all over the board. He can't help himself. Stop. You're killing me. Now, come on. The web site pays for itself. See those little flashy thingies against the gray and black motif of the bleak story of credit scoring? They are called a-d-v-e-r-t-i-s-e-m-e-n-t. They bring in enough money to pay for web space, a domain name, and beer! It's self-perpetuating! Only in America; what a country! YOU SHOULD TRY IT FOR YOURSELF, SEAN!!!! Oh, wait-- there would be no audience for what you are saying. Nevermind. It is better for you and your agents to slink around the discussion forums-- stealthy, anonymous (the nulled, anonymous255@yahoo.com), smooth-talking, suave operators, who entrance us and entrench their creed before we even know what is going on. Booooooo. Boogie, boogie. We (and I do speak for everyone) are glad you came out of the closet-- it is great comedy! Welllllllllllllllllllllllllllllllllllllllllllllllllllllll, mystery lovers! Could it be that Gregorino has a hidden agenda (HIGHER TAXES FOR EVERYONE! MORE GOVERNMENT! BIG SOCIAL PROGRAMS! EAT RED MEAT!)? Or is he (big bad Greggy) just having a little fun with a bunch of poor, misunderstood credit reporting agencies ($5 billion industry)? And what about those 25 questions? And what ABOUT that research and the letters to Trans Union? Watch this space!
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| | Friday, November 19, 1999 - 12:03 pm Voigtkampff: You partially misunderstood me. Your suggestion that the credit reporting agencies could bear the cost of the regulation is exactly my fear. They will bear the cost and that cost will be passed on to credit grantors in the form of higher costs to obtain credit reports and those costs will be passed on to consumers in the form of higher interest rates and fees. Greg: Yes, I am a devout libertarian and I mean that in its moral, ideological and theological sense. It is wrong to force other people to do things your way. Just as it would be wrong for a person or group of people to burst into Fair, Isaac headquarters and force them to change their formula at gunpoint it is equally wrong to appoint the people's agent (government) to hire people (police) to break into the Fair Isaac's headquarters and force them at gunpoint to change the formula. Or do you think that 51% of the vote is all that's required to rip life, liberty, property and freedom from any successfully demonized company or minority for the majority to feast on in parasitic squalor? Everyone seems to want the FTC to take a grander role in regulating these businesses and crushing things we don't like but does no one bother to ask the simple question: What authority does the federal government have to undertake this task? It is established by the constitution and the Tenth Amendment that our federal government is one of enumerated powers and that the powers not granted to the government by the Constitution are reserved to the states and the people, respectively. What clause of the constitution gives the federal government authority to create the FTC and plague multiple businesses with it? Who says that states can't better handle the regulation of credit agencies? Who says that regulation is required at all? If a person is slandered or defrauded by collection or credit agencies why can't they just sue under already existing laws? What good is the Fair Credit Reporting Act, especially since special interests have infested it to specifically ban people from suing when they are wronged? Government is not the solution, it's the problem.
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| | Friday, November 19, 1999 - 01:56 pm a-MER-i-ca, a-MER-i-ca Dah, dah, dah, dah, dah, daaaaaaaah. Give it a rest. I'm going to keep bringing you back to the subject: incompetence at the national repositories. They can't explain their product. Let's go over it again: "Ma'am, you have too many credit cards." "Oh, my. How many should I have?" "I don't know." "Who can tell me?" "Nobody." "I have too many, but you can't tell me how many to have? I'm outta here. I've never heard such a ridiculous bunch of... " "Mom, come back!" You are trying to make this into a political argument, and are failing. I have directed my communication directly to the credit repositories and have had little to do with lawmakers and regulators. The reason? To negate whining like yours about the spector of big government taking over our lives. I chose to meet the issue, directly, with those responsible. Their response was to stop communicating. If congress or state legislatures decide to pass laws that mirror what I am saying, so be it. And what's this about 51%? It still takes 2/3 of the senate. I didn't call the FTC's forum, they did. I didn't write the law, a senator did. I didn't create the biggest PR problem in the business-- the CRAs did. The stories are relevant-- anything to do with scoring goes on the site. The reader can decide for themselves. If they don't like my slant, they can complain. I just ask questions. I am a lone voice, acting independently. It was easy to anticipate, a long time ago, how this thing would progress. THE BIIIIG SECRET. What a hoot. I wouldn't have invested my time in it otherwise-- I don't choose losing causes. I am only surprised at the short length of time it took.
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| | Saturday, November 20, 1999 - 03:51 pm Greg: First of all it takes 51 votes in the senate. I suppose you may be referring to the art of the filibuster, but it only requires 60 votes to invoke cloture. This is not 2/3rds by any stretch of the imagination. Regarding incompetence at the national credit repositories all I can say is: 1. I never had any problem with Equifax. 2. Experian personnel are incompetent, but once I got to their "experts group" my problems quickly disappeared. 3. Trans Union is both incompetent and unhelpful. 4. None of the above has anything to do with Fair, Isaac who has always been helpful and, as far as I can tell, isn't to blame for credit report inaccuracy. Fair Isaac published research (which I previously posted) indicating that the average person approved for new credit has 7 revolving accounts and 4 installment loans. Now admittedly this may mean that 7 is the right number. It may also mean that the right number is twice your installment loans less one. It may also mean that Americans have too many revolving accounts, yet it isn't a big enough factor to prevent people from qualifying for loan products. Also, as you very well know, even if a person has too many revolving accounts cutting the number of them may actually lower a person's score by harming their revolving debt to credit limit ratio, which plays a large role in the credit scoring algorithm. Anyone who advises a person on this delicate a matter without seeing their entire credit profile is as dangerous as a blindfolded surgeon. To be certain some of the questions you raise on your 25 question list are good, such as who decided that four would be the number of reasons given, instead of three or five or 72? But a lot of them are just junk, imo.
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| | Saturday, November 20, 1999 - 06:32 pm Sean: About me, you said, "Had he done a little research he would've realized that the Trans Union model doesn't include the number of revolving accounts as part of its model (this is because Trans Union is the weakest of the three credit bureaus with the least market share and the least amount of consumer information)." Show us the Trans Union list of reasons a score is not higher, or a link to it.
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| | Saturday, November 20, 1999 - 09:06 pm Sean. I'm still confused about the fear that over-regulation costs would trickle down upon consumers. What if the credit reporting agencies are fined for failing to correct inaccuracies? Rather than having these fines passed on to people purchasing credit reports, isn't it also possible that the CRA will stop making so many mistakes. I think that you are assuming that the CRA's incompetence in adhering to the FCRA requirements is inevitable - that the inaccuracies will continue no matter what, but now someone has to pay for trying to fix them and for the fines themselves. But maybe the fines would succeed in fixing these problems and there would not be as many inaccuracies, hence no costs in fixing them. Since you state the Equifax is OK but the other 2 are incompetent, then there is REALISTICALLY room for improvement. Maybe the regulation would motivate that improvement. And don't forget that the inaccuracies themselves are a cost, one that is measured in harm to credit and inconvenience, rather then in terms on money. I simply propose placing as much of that cost with someone else besides the consumers, preferably with the party most responsible for that cost.
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| | Sunday, November 21, 1999 - 07:00 am Greg: Easily done. See http://www.advantagecredit.com/creditreporting/adverse_reason_codes.htm and look under the Trans Union column. Under what is code 3 and code 4 for Experian and Equifax you will find a big n/a under Trans Union. Apparently you do not understand n/a so let me explain it to you. It means not applicable. In short, you will never get a denial message from Trans Union that says "Too many bank or national revolving accounts" nor will you get one that says "Too few bank revolving accounts." For you to call up Trans Union and ask them about denial codes that are only on Experian and Equifax scoring models is kind of silly, don't you think? Of course, this is only one link so let's try another one: http://www.harvestmortgage.com/FICOscoring.htm Hey, Greg -- here's a thought... why don't you include links to one (or both) of these sites from your site? Or are you too busy trying to make the various players look incompetent to actually provide useful information? Voigtkampff: To be certain there is room for improvement in the credit reporting industry and there probably always will be. The theory everyone seems to be espousing is that credit reporting agencies don't care about the accuracy of the information they sell. I completely reject this notion. Accurate and useful consumer information is the life blood of these companies. They are very motivated to provide their customers (credit grantors) with as much accurate and useful information as is cost-effective. Accordingly they have checking algorithms that detect certain inconsistencies, for example: If a company reported someone current last month and 60 days late this month it gets flagged for verification. Also, if a company normally has 1% delinquency and suddenly has 0% or 2% delinquency it gets flagged for verification. People have complained for awhile that consumers would go to get a mortgage and would be able to prove that some of the information on their report was inaccurate but that credit reporting agencies wouldn't update their scores. Fair, Isaac responded by coming out with a new algorithm that would permit underwriters to manually correct the information and recalculate the scores immediately. Neither Fannie Mae nor Freddie Mac will accept the scores produced this way as valid. Is this Fair, Isaac's fault? Equifax now fast-tracks this type of dispute and can have a corrected profile and scores back to the underwriter in 7 days. Equifax is the leading producer of consumer credit reports and continues to take the lead in improvements. I should like to point out that no regulations, fines, government oversight, referrendum or sabre-rattling by the FTC brought either of the above about. From where I'm sitting Fannie Mae and Freddie Mac are the villains. 1. Why does Fannie Mae and Freddie Mac insist on taking the middle score from a triple-merged report? Why not the top score? Since the algorithms are statistically validated they could approve more people for mortgages without an increase in delinquencies. Has anyone asked them for the research they have done to support this position? 2. Why won't Fannie Mae or Freddie Mac approve the use of the new FICO scoring system that permits underwriters to instantly correct scores based on inaccurate information? 3. Who runs Fannie Mae and Freddie Mac? Some people think that they are government institutions, but they aren't -- anyone can buy stock in Fannie Mae and Freddie Mac, but they have a special exemption from disclosing who owns how much of them. Can anyone demonstrate to me why these two institutions have a need for exemption, but others (like Microsoft, Intel or Fair Isaac) do not? Back to the previous topic: Some people feel that the credit grantors should provide 100% accurate information or that they should be compelled to meet a certain accuracy percentage regardless of the cost involved. This is unrealistic and unfair. I say if someone wants to provide 100% accurate credit reporting let them start their own credit reporting company or buy one of the existing ones and then they can do whatever they want with their own money.
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| | Sunday, November 21, 1999 - 08:20 am Sean: What is #26 in the Trans Union column? The first link you provided was published on creditscoring.com a long time ago. It takes only two clicks from the home page: that would be CRITERIA from the home page, then ADVERSE REASON CODES on the Criteria page. I couldn't think of a better way to describe it than CRITERIA. And here's another one you can add to your list: http://www.yourmortgage.net/fico.htm , also on the CRITERIA page.
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| | Monday, November 22, 1999 - 03:20 am Yikes!!!! I stopped understanding your posts "days" ago. As just your normal everyday consumer I would like to add my spin to it. I filed bk several years ago. Personally I'm grateful for credit scoring. It gives creditors something else to look at then a great big BK on my report. It does not automatically bar me from receiving credit. In other words, as long as I have kept my nose clean I still have a chance on a pretty decent rating. I don't think I would have had that chance before "credit scoring" became the norm. I would like to know what my score is however and would be very interested in any website that will sell and/or divulge it.
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| | Monday, November 22, 1999 - 08:22 am Greg: I suggest you contact Fair, Isaac by calling (800) 777-2066 and get their scoring FAQ sheet (designed for lenders). You will immediately see that Code 26 is not produced on generic FICO models for any of the bureaus. The only model that standardly produces this code is the Uniquote model (which I've never even heard of before, have you? Maybe it's an insurance-quote model?) Additionally Code 26 is produced for the Equifax Beacon and Experian FICO model only as an industry-option and not part of the generic model. If you want to talk about the esoteric details of some other scoring model that may or may not be "Emperica"lly derived that's fine, but I was assuming based on your quotes (see http://www.creditscoring.com/letters/tu.htm) that we were talking about the Emperica model. I refer to your quote: "Will you give me the Emperica score for my credit file?" and "To attain the highest credit score (in the score Trans Union produces for conventional mortgage loan underwriting, the 'Emperica'), how can I tell what is the right 'number of bank revolving accounts'?" The answer, Greg, is that in order to get the highest score for the Emperica model used for conventional mortgage underwriting that the number of revolving accounts you have is not a factor. And now one last quote: "There is no reason to go on with this guy....The best response going forward is no response."
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| | Monday, November 22, 1999 - 08:38 am Why would you trust anything Fair Issac says? They won't give out their exact formulation, so anything they give out to the public can be contrued in any way you want. Quoting Fair Issac means absolutely nothing.
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| | Monday, November 22, 1999 - 10:16 am Sean: The page you used to prove your point is now not good enough for you. You are writing the rules while playing the game. Cliff Clavin would love the Internet. Some use the anonymity they are afforded in discussions to espouse their views and opinions-- and statements they would like to be taken as fact-- without having to take responsibility for them. With free email addresses plentiful, the posters can flit from address to address and feel that they are invisible and invincible. The reason the topic is so hot: there's no disclosure of how it really works, so when you talk about it, eveybody's opinion counts... or not. An ultimate discussion topic, rife with speculation, ripe for charlatans. Take their comments and advice with a grain of salt.
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| | Monday, November 22, 1999 - 11:11 am Lynn: you asked for information of any site that will order your reports including scoring. www.carreonandassociates.com it comes with a credit eval,credit reports (all three)and scoring for each plus tips to improve your credit. this message is intended for lynn because she asked for the resources :)
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| | Monday, November 22, 1999 - 02:37 pm Kristy: If Fair Isaac can't be trusted to provide accurate information about their own scoring model then neither can you. Greg: It's not my fault that their posting isn't comprehensive like the one I have in my hand right now. At least it's something. It's better than nothing. Unfortunately it only shows 33 denial codes whereas the list I have shows denial codes as high as 99 and includes models available only in Canada. I have, however, provided you with the phone number I got the information from. This isn't, as you say, completely unverifiable. Why don't you get that list, Greg? What are you afraid of? As for the general anonymity of the internet, I should like to point out that you are as anonymous as the rest of us -- and far more anonymous than I. I have my picture posted on my profile.
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| | Tuesday, November 23, 1999 - 12:09 pm Maybe we are in two different worlds here. Lynn wanted a company that could provide her with her scores. I don't make up the scores, we use the scoring matrix everybody does. I assumed she was looking for a company to run her credit and give her the scores not just the accounts. Besides why is everyone so crazy over the scores??? Yea, they at times produce less then desirable results, but unless it gets changed, why argue over how it is calculated,released, not formulated right etc... Focus on your overall credit performance and you will care less about scores. This is sounding less like credit advice to help people and more like politics. Take it to congress
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| | Tuesday, November 23, 1999 - 05:54 pm The topic of this thread is "How should the law protect consumers?" If people choose to raise questions related to the calculation and/or release of scores, then they are on topic. The products and services offered by Carreon and Associates are less in keeping with the topic of this thread than the comments that you say are inappropriate. BTW: Some people with good credit are concerned about these issues too. I'm tired of hearing the implication that if a person questions credit scoring, it means that their credit sucks. My credit is just fine, thank you. But I still have questions and concerns about credit scoring. How will the scoring system ever be changed if the subject is not discussed? Take it to Congress? We plan to. Where does it say that this forum is for credit advice only? Follow the threads. Some are for credit advice and some are for an open discussion of credit related issues.
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| | Wednesday, November 24, 1999 - 02:53 am Kristi: Thank you for the info. I certainly didn't mean to cause you grief over a simple response to it. Just because somebody doesn't agree with credit scoring doesn't mean it doesn't exist. Wether we like it or not, for now, we must deal with it. There are good and bad sides to most everything, this included. As for the topic here how can the law protect consumers. I agree that scores should be made available, along with ways of improving (many of which are common sense, pay your bills on time, don't overextend yourself, etc.., others are much more complex)I think too many people are trying to reach a "perfect score". I also believe that we should be entitled to one free credit report every year so we can be sure there is no mistaken information on there. And of course, the cra's should be held accountable for making timely corrections.
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| | Wednesday, November 24, 1999 - 09:55 am Lynn: Yes in deed. I agree. The credit scoring system is pointless, alot of the time. Real humans rarely look at your credit anymore, the problems with this as I mentioned in another thread are countless. I have clients with perfect credit who score only 600 and I have clients with horrible credit who also score 600????? Now is that crazy or what?. The scoring system makes no sense most of the time. I myself have perfect credit,low balances,closed-unused accounts,a home loan that I owe next to nothing on and have over 170k in equity, no inquiries etc and I only score 50 points hire then one of my clients with terrible credit? How the heck does that formula work....... I can't say this enough, as I am sure you know. The CRA will never and have never worked for us. They profit from creditors and could care less about your disputes. I too think it is outrageous that they use to give you one free report a year but now you can only get it free if you are unemployed,disabled or denied credit! This forces consumers to lie just to get a free report! as for Barbara's comment: There is discussing credit scoring and factors and then there is *****. Some of these conversations go so far off of the initial topic that I get a headache keeping up with the sarcasim and personal attacks that some seem to do to one another. We are all here to learn new things about the industry but hearing a few write a book on a sarcastic note is annoying.... I look at this the same way I do the conferences I attend. I hope to learn something new but pray a know-it-all obnoxious speaker doesn't attend!
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| | Wednesday, November 24, 1999 - 11:07 am Kristi: You claim your client had "perfect" credit and another client had "horrible" credit yet both scored 600. What made one client's credit "perfect" while the other was "horrible"?
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| | Sunday, November 28, 1999 - 04:12 pm Sean: I'm not afraid of anything. Indeed, I write a web site that's none-too-flattering to the credit reporting agencies and Fair, Isaac (Want some fun? See the page about the "pioneers"). Fair, Isaac's number you suggested I call gives instructions for mortgage lenders to leave their name, company name, and fax number, and they will fax the information. The consumer is given a spoken message and told to leave their address so Fair, Isaac can send information. They could easily resolve arguments like this by posting this highly informative document to which you refer on the Internet. I have even goaded them, Fannie Mae, Freddie Mac, and the credit reporting agencies on the page http://www.creditscoring.com/pages/forumtranscript.htm saying, "Links from this page to the list from these credible sources will be provided when they get around to publishing it on the Internet. We can rank them in chronological order." This follows the credit reporting agencies' association's statement in front of the assembled FTC credit scoring forum that the consumer can have access to the list (it had to be dragged out of their representative-- when asked about it, his lawerly response was, "The list of factors that are part of --that could be construed as a full list?"). I am only one person they would be informing with that one fax. But many could see the information without having to go through the rigamarole of the fax business if they would post it on a web page. Indeed, it isn't even an automated fax-back system-- they want you to leave the information on a recorder. For some reason, they are trying to slow down the dissemination of that information. What I, an individual, may be afraid of (if there were anything), or informed about, is not a story. What they are afraid of, or refuse to release so someone could have it at will, certainly is.
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| | Monday, November 29, 1999 - 07:17 pm Don't say you're a consumer, say you're a lender seeking greater insight into credit scoring and leave the message on the machine. I can't speak for why it wasn't automated fax back, but I can say that I got my fax within 3 hours.
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| | Tuesday, November 30, 1999 - 04:43 am Christine - >> Proactive = slave labor. No, proactive indicates someone who is a planner and a detail-oriented person. It indicates someone who is concerned enough to make sure that, if mistakes are made, they get them corrected BEFORE it's too late. If you think that we should all ignore everything and HOPE companies don't make mistakes, and only deal with them when we're in the middle of, say, trying to obtain financing, that's silly. Do you change or oil on a regular basis, or do you wait until the "check engine" light starts blinking - which only happens when it's TOO late to do anything about it. Is it the auto manufacturers or dealers or part store's responsibility to send you a letter every 90 days to tell you that it's time to get an oil change? Do you just head to the malls and HOPE that the stuff you want is on sale, or do you check the sales papers and coupons to be sure you're getting the best deal at the right place of business? Or is it the stores responsibility to send you a follow-up letter that says, "Don't forget to check the sales papers before you shop". What if there is a misprint in the sales paper and you are overcharged and don't realize it? No, proactive does not mean slave labor. Proactive means being RESPONSIBLE and CONCERNED about your OWN well being and status. > Exactly WHY do I need to be the credit bureaus' and the creditors' SLAVE? You're not a slave to them. You're being responsible to yourself, because (quote from the move 'The Breakfast Club') "The world is an imperfect place - screw fall out". > FYI, it is absolutely NOT true that most consumers > know about the derogatory information on their credit. Apparently, you're not following me. Yes, most deadbeats SHOULD KNOW that ACCURATE, DEROGATORY INFORMATION is on their credit reports if they don't pay their bills. And if they DON'T know that ignoring the phone calls and letters from valid bill collectors will result in negative, accurate information on their credit report, then it's because of their own ignorance of the laws. I NEVER said that INACCURATE negative information was always known by the consumer. But INACCURATE information can be taken care of in a timely manner. And don't cry that I'm one of the 'lucky' few that it 'happened to'. I've worked (on a personal level) with half a dozen freinds and acquaintences' records , and there was never an issue getting inaccurate info removed. >> YOU had a different experience, but there are millions of people >> who DID pay their bills ON TIME and they still have bad credit. >> That's because so much of it is INCORRECT. I guess they should have been PROACTIVE, eh? >> ** I ** should PAY for a service to monitor who illegally accesses my credit files? Do you pay taxes to pay police officers to handle people who illegally steal from you or illegally harm you? Yup. >> I found a solution to inquiries: I'm using different names, addresses. >> It's free and it's good to know I'm adding to their files :) What does that get you? I don't follow. >> One of these days I might just have one clean file with just a few credit card accounts, >> and hopefully all the garbage is going in the other files. Eliminate the SOURCE of the garbage, and you won't have to worry about where to dump it.
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| | Tuesday, November 30, 1999 - 04:57 am Christine - >> Rbielak states: "Multiply that times 33 cents for mailing, >> and the bureaus would have a heck of a burden." >If 33 cent is a burden to a credit bureau, what do you call the $8 plus > 33 cents for mailing that the consumer has to pay to get just ONE credit report ONCE? The bureaus' update 30 million records a day. Do 30 million people need to get a copy of their credit report every day? Your analogy is way off, figuratively speaking. That would mean that you, as a consumer, would need to request your report every 8 days - 240 million people, 30 million records a day updated, assuming every single record update is for a different person. And if you had two records updated, your frequency would only increase. >> ($8.33 x 3 x 12 x the number of people in the US) + (the >> number of people in the US x 1 hour labor x 12) 12 bucks an hour? Gheesh. How can you afford to live? :) >> Could somebody tell me how many people we got >> here so I can calculate this figure? Approximately 240 million. >> And what's YOUR hour worth? $37.47, but that's beside the point. >>And all this just to find out who slandered us last month ... >> we haven't even started to dispute. I've never been "slandered". Neither have the numerous people that I've helped out. But then again, my friends try to pay their bills on time to avoid the problems to begin with. I suppose that if you had been PROACTIVE enough, you'd have research the company (that slandered you) BEFORE you decided to do business with them to see if there were any issues with their financial reporting. Oh, yea, I forgot. You're not a slave. Sorry. Oh, and about the 8 bucks. If you want a copy of your report, just dispute something. ANYTHING. I paid 24 bucks for my first three reports (one from each bureau), and have never paid for a copy again. And I have approximately 20 reports from EACH of the bureaus, all within the past 1.5 years. Guess I saved myself $480, but then again, I shouldn't have been so proactive.
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| | Tuesday, December 21, 1999 - 11:31 pm You mentioned being left in the dark when it comes to your credit score I found this site that will give you your credit score same day http://www.icreditscore.com
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