According to Fair Isaac Corporation, creator of the FICO score, one of the three credit bureaus, Experian, will no longer allow consumers to view their FICO scores based on Experian data.  This becomes effective February 14, 2009.  

After that time, consumers will only be able to obtain two of their own FICO scores, but not all three.

WHY IT MATTERS

Since the FACT Act of 2003, we consumers have had the ability to view our credit reports and purchase our credit scores.  This allows us to be prepared before going to a lender by checking our reports for accuracy and knowing what our scores are ahead of time. 

The majority of lenders in the U.S. use the FICO scoring formula, even though the credit bureaus have their own scoring formula, designed to compete with FICO.  For mortgage applications, the lender typically uses the middle or “mid” score.  Thus knowing all three FICO scores is imperative to the proactive consumer.  Especially if your mid score is only a few points from the lender’s minimum, you can take steps to optimize and build your credit to be able to qualify.

WHAT IT MEANS

Consumers will be unable to accurately compare their own credit information on an equal basis with what their lender will see.  Experian will still make a credit score available, but it will not likely be an apples-to-apples comparison with the lender’s scores.  This is a disadvantage to consumers who may have time constraints for loan approval, perhaps due to the need to refinance their mortgage to avoid foreclosure.

Additionally, consumers will not know their Experian FICO score until a lender pulls their credit.  At that point, the consumer gets a Hard Inquiry against their credit score because of the authorized credit application.  When we consumers check our own credit scores and reports, it is a Soft Inquiry and has no negative impact on credit scores.

WHAT TO DO

You can issue a formal complaint to your Congressional representatives and to the Federal Trade Commission, the regulatory agency that oversees the credit bureaus.  Please see the end of this article for the email I sent to seven Congressional Reps.  You can also complain to Experian directly at 714.830.5300 to voice your opinion.

If you didn’t get them in January, you may want to get all three of your FICO scores before the 14^th.  This will provide a good picture of where your credit rating is right now, and give you the opportunity to check with your lender to determine how close you are to the current qualifications.  Use the third link in the Links box, upper right on this page.  Contact us for discount codes.

Spread the word.  Forward this information to your friends and relatives now.

It is extremely important, especially during these challenging economic times, for consumers to take charge of their Personal Financial Fitness.   Becoming informed, correcting your credit reports and knowing your FICO scores puts you that much closer to reaching your goals.

EMAIL SENT TO CONGRESS

Beginning February 14th, one of the three major credit reporting agencies, Experian, will stop the availability of the consumer FICO score.  This is an affront to all consumers who are trying to maintain their financial futures in the midst of an ongoing national economic crisis and who are attempting to protect their pocketbook and credit rating. 

In 2003, FACTA finally gave consumers the right to see their credit reports and have the opportunity to purchase their credit score.  Having this information and being prepared before applying for a loan gives consumers an advantage and increases their financial options.

The majority of lenders in the U.S. use the FICO scoring model for their lending decisions.  The other scores, including Vantage, that the three credit reporting agencies developed to compete with FICO and which they heavily advertise to consumers are NOT the same.  In fact, they are usually much higher than a true FICO score, often giving consumers a false sense of optimism and even credit complacency.

As a consumer, I am appalled that a company whose website claims they are “…dedicated to helping organisations and consumers make commercial and financial decisions with greater confidence and control” would deny   American consumers this important and financially vital information.

As a credit consultant, I know that consumers will have additional struggles and hurdles when trying to refinance their homes, or purchase a vehicle, or get a personal loan or credit card due to lack of accurate, effective information. 

They will lose the ability to check their own FICO scores, which does NOT count against their scores.  They will have to wait until a lender pulls a tri-merge report to know their actual, third FICO score, resulting in a Hard Inquiry and counting against their score.

I truly hope that Congress will consider the ramifications of this development as they review all options in helping consumers, and the nation, get through this challenging time.

Sincerely,

Dana Coyle