Friday, February 6, 2009

Pretty soon you won't know your own credit score

Since I ranted yesterday about the need for more financial education, I was going to make today's post about a good program a friend told me was going on in some Louisiana schools.

Leave it up to the credit rating agencies to ruin a positive end-of-week post. Experian, one of the three agencies whose ratings of your credit are the most important factor in whether you can borrow and how much interest you'll pay, is in a beef with Fair Isasac & Co., the company that created the so-called FICO score, according to the New York Times.

The result of their beef is you'll no longer be able to see the credit score that Experian assigns to you, even if you're willing to pay for it.

If you don't understand why that's ridiculously important, think of it this way: Say you were divorced and wanted to remarry, only your ex-husband or wife has told every available single person in town that you were no good. The problem is no one will tell YOU that you're being called no good, so you can't understand why no one will date you.

In this situation, Experian is the equivalent of the rumor-spreading wife: telling every lender or employer who asks how good or bad your credit is, but refusing to tell you what your score is.

Unless there's a fix for this soon, I imagine many consumers are going to find themselves with a problem.


Butterrfly said...

Ok...that makes no sense.. it makes credit repair difficult quite possibly impossible when you have no clue as to what is being said about you. Is that really legal? It seems like there must be or should be something on the books to protect consumers.

as for your analogy...why does it have to be the ex-wife spreading rumours??..It could as easily be the bitter ex-husband... ;-)

Mia6998 said...

Why you take it there? I said it was more like a teacher giving you a grade but not telling you what grade you got.

But anyway, you can still request your report from Experian to check for errors BUT you have no idea what score they are giving you and telling lenders based on the information they have.

I want to know if it is possible when applying for a loan, new credit, etc. if consumers can request which reporting agency to use. Most places only use one, so they aren't aware of what your score may be on the other ones.

And historically, at least for me, Experian is usually the one that scores the lowest in comparison to the other 2 agencies. For me, as of Sept 2008, there was literally a 35 point difference between Experian and Equifax. TransUnion fell in the middle but closer to the Equifax score.

So imagine if a creditor is only looking at that Experian score, I'm screwed. And that fact that there is such a large gap in scoring between the 3 agencies has always bothered me.

Mia6998 said...

Keith - save the positive post for Monday...we gonna need a pick me up.