Credit Score Secrets Exposed

by Ian Webber

Many people are shocked to hear that the credit scores sold by the credit bureaus are not the same scores used by lenders. Here are some amazing insights into the world of credit scores from a leading credit repair expert.

o Many Scores so Little Time

There are lots of different credit scores offered on the web. If you are starting a credit repair program you may want to benchmark your scores. So you are likely to go online, pick out a website and pay the price. Unfortunately, the odds are that the scores you purchase will have no resemblance to the scores a lender will use to underwrite a loan.

The Real Scores

There is only one website where you can purchase the same scores lenders use; this is MyFico.com, the website for Fair Isaac Corp the developer of the FICO scoring model. As a credit repair consultant it is a matter of daily consternation to me that the same credit bureaus that sell these important FICO scores directly to lenders will not sell FICO scores to consumers.

The Wrong Scores

You can purchase credit scores from Experian, Equifax, and TransUnion, but they are not FICO scores, and therefore of no real credit repair value. These credit bureau scores are of their own creation and exist solely for the purpose of cashing in on the ignorance of consumers. I cannot imagine any scenario where there would be no moral culpability on the part of the bureaus.

No Practical Application

I have heard it said that although these bureau scores are not the same as FICO scores they are a way for consumers to track changes in their reports. This is not so. The bureau scores just don’t behave the same way. In other words, changes in your credit affect your FICO scores differently that they do the bureau scores. These bureau scores have no practical application, for credit repair or otherwise.

The Equifax Exception

For the record, Equifax offers the only credit repair friendly credit score. In fact, they do offer a FICO score. They currently use a previous generation of the software, and they only apply it to their own data, but it will generate a close approximation of your real score and generally behaves the same and could be used to monitor credit repair progress.

Measuring Credit Repair Progress

Unfortunately, this one credit bureau nod to integrity does not provide an optimal credit repair solution. You should know that many lenders, and all mortgage lenders, purchase all three FICO scores and use the middle of the three scores. An accurate measure of your credit repair status requires all three scores

Ask Your Lender for Your Reports

Given that lenders are able to purchase FICO score from the credit bureaus, you may have a roundabout way of getting your hands on a real tri-merged report with all three FICO scores. If you recently applied for a mortgage you may consider contacting your lender and asking for a copy of your report. Tri-merged mortgage credit reports are usually quite detailed and ideal for credit repair purposes.

Bend the Rules Just a Bit

By the book, lenders are not supposed to provide copies of reports directly to consumers. This is standard boiler plate language included in lender agreements with their report provider. The Fair Credit Reporting Act includes an information sharing clause; in the case of credit denial consumers are entitled to a copy of their reports, but this is a hassle compared with calling your lender and asking for the small favor.

Credit Repair and Your Reports

If you want your credit scores to establish a starting point for your credit repair effort I should say a bit more. If you go to MyFico.com to purchase your credit scores they will come complete with your three credit reports. Unfortunately, as if happens, even though Fair Isaac is the only source for your scores, they do a terrible job on the credit reports.

Fair Isaac Report Problems

MyFico.com credit reports are edited to the point of being useless for credit repair purposes. This is especially true if you intend to investigate all the information that should be available on your reports. Fair Isaac reports are highly sterilized, and in many cases actually exclude your account numbers, which you may need for your credit repair effort. So, for credit repair purposes you should get your reports from the credit bureaus. Phew!

Making Do

If it all seems crazy and unfair remember that the credit bureaus have the credit data, and Fair Isaac owns the credit scoring software. Everyone wants to make money and until they figure out a better way to work together we just have to make do as best as we can. Good luck!

Copyright © 2008 Ian Webber. All Content. All Rights Reserved.

ABOUT THE AUTHOR
Ian Webber is an expert in consumer law and credit repair. Ian is a graduate of the London School of Economics and The University of Chicago where he earned his LLM. Ian consults with one of the leading online credit repair services and is currently based in Florida.