topic Re: Experian roles out new credit score in Credit in the News

Experian roles out new credit score

marty56 — Sat, 16 Jun 2012 20:11:33 GMT

http://www.huffingtonpost.com/2012/06/14/experian-new-credit-score-extended-view_n_1596943.html

No haven't have gone lib but Yahoo had a link to it. From the article:

Currently, consumers cannot get a copy of their Extended View credit report. Wagner said that if enough lenders adopt the new score, then it could be made available to consumers in the future.

As Larry the Cable Guy would say - You know that's funny and way too ironic.

Re: Experian roles out new credit score

psychoinhell — Sat, 16 Jun 2012 20:24:37 GMT

I definitely do not like what I read. Some of the criteria makes about as much sense as car insurance pulling my credit report to give me a quote. They can stuff their studies. What does my inability to pay my bills (or ability to do so) have anything to do with my driving abilities? They may as well say because I have a size 14 foot, it is hard for me to keep gravity from pulling it down on the gas pedal (which is true by the way).

I do not think we should legitimize payday loans, what is next pawn shops or loan sharks that report?

This just smells bad!

PS- marty, nothing wrong with being lib... as long as you do not try to take away my AR and AK :P

Re: Experian roles out new credit score

pizzadude — Sat, 16 Jun 2012 20:49:53 GMT

I dub their new score "UnBanko". I'm sure it will only add to the confusion around credit scores, especially since it sounds like this score is going to be targeted towards people who won't have a FICO score.

Re: Experian roles out new credit score

marty56 — Sat, 16 Jun 2012 23:24:37 GMT

psychoinhell wrote:
PS- marty, nothing wrong with being lib... as long as you do not try to take away my AR and AK :P

I guess I am more libertarian.

I hear you on the gas pedal. LOL on my next speeding ticket, can I use that excuse. I have smaller feet though but it sounds good.

IMHO I don't think we have too much to worry about someone using the new scoring system since it probably be as widely used as their Vantage score was.

Re: Experian roles out new credit score

psychoinhell — Sun, 17 Jun 2012 06:50:19 GMT

Next time a cop turns around when you are driving down the interstate, jump off at the rest area and run into the bathroom.

Had a cop follow me into the bathroom, I threw my wallet out to him and told him he was going to have to wait to write me a ticket, I had a 911. He actually ran my license and then told me he understood (no ticket) :p

Re: Experian roles out new credit score

marty56 — Sun, 17 Jun 2012 11:19:56 GMT

Wouldn't that have been a 912?

Re: Experian roles out new credit score

psychoinhell — Sun, 17 Jun 2012 16:47:18 GMT

touche, good one :P

Re: Experian roles out new credit score

marty56 — Mon, 18 Jun 2012 01:20:51 GMT

psychoinhell wrote:
touche, good one :P

Can't take full credit. I stole the idea from the first and best Smokey and the Bandit. I think it was the Great One's last film.

Re: Experian roles out new credit score

stan_the_man — Mon, 18 Jun 2012 04:20:40 GMT

"Fifteen lenders are currently considering using the score, Steven Wagner, president of Experian Consumer Information Services, told The Huffington Post. He would not identify which companies they were, but said that among them were both small and large lenders. The company said the score could be used by banks, credit unions and auto lenders, as well as phone and utility providers."

Am I the only one who thinks this means "We offered the score for free to 15 lenders, but none of them has taken us up on the offer yet."?

Re: Experian roles out new credit score

marty56 — Mon, 18 Jun 2012 09:03:22 GMT

stan_the_man wrote:
"Fifteen lenders are currently considering using the score, Steven Wagner, president of Experian Consumer Information Services, told The Huffington Post. He would not identify which companies they were, but said that among them were both small and large lenders. The company said the score could be used by banks, credit unions and auto lenders, as well as phone and utility providers."

Am I the only one who thinks this means "We offered the score for free to 15 lenders, but none of them has taken us up on the offer yet."?

Or out of thousands we gave it to, only 15 said they might use it. The others ran away screaming.

Re: Experian roles out new credit score

Revelate — Mon, 18 Jun 2012 23:02:25 GMT

We aren't the customers for Experian.

It's going to be tested in subprime lenders, it wouldn't surprise me if one I used to work at is in the list (since they are firmly between PDL's and traditional unsecured loans) and pull EX exclusively. It's not hard to test, but it takes time. It's one extra generated score, one extra entry in a customer's database record, and one extra thing to check on the OLAP query later.

If the score provides better resolution than either FICO (which admittedly sort of sucks for under-banked people for all the known reasons) or their internal models, it'll get adopted. If it reduces first-payment defaults in the deep subprime space, it'll absolutely be used.; however, it won't replace traditional FICO scores everywhere else. This is sort of like the FHA / GSE's with that funky score for housing approval if you don't have a real FICO... but if you do, they'll use it without regards to anything else.

Most of the industry and the CRA's are going to something like this, TU announced something similar earlier this year. I'd be willing to bet Equifax likewise makes an announcement by the end fo the year at the latest. Alternatively FICO themselves may try to come up with something, it may already be in their NextGen score for all I know.

Re: Experian roles out new credit score

stan_the_man — Mon, 18 Jun 2012 23:44:47 GMT

Revelate wrote:
We aren't the customers for Experian.

It's going to be tested in subprime lenders, it wouldn't surprise me if one I used to work at is in the list (since they are firmly between PDL's and traditional unsecured loans) and pull EX exclusively. It's not hard to test, but it takes time. It's one extra generated score, one extra entry in a customer's database record, and one extra thing to check on the OLAP query later.

If the score provides better resolution than either FICO (which admittedly sort of sucks for under-banked people for all the known reasons) or their internal models, it'll get adopted. If it reduces first-payment defaults in the deep subprime space, it'll absolutely be used.; however, it won't replace traditional FICO scores everywhere else. This is sort of like the FHA / GSE's with that funky score for housing approval if you don't have a real FICO... but if you do, they'll use it without regards to anything else.

Most of the industry and the CRA's are going to something like this, TU announced something similar earlier this year. I'd be willing to bet Equifax likewise makes an announcement by the end fo the year at the latest. Alternatively FICO themselves may try to come up with something, it may already be in their NextGen score for all I know.

FWIW -- It doesn't have to reduce defaults, it just has to help them improve pricing to reduce their overall loses. For example, help creditors put higher risk customers into more expensive products.

Re: Experian roles out new credit score

AZHeather — Mon, 18 Jun 2012 23:55:13 GMT

Great....more places for them to get and add wrong information to your reports! YAY! :smileyfrustrated:

Re: Experian roles out new credit score

Revelate — Tue, 19 Jun 2012 00:12:38 GMT

stan_the_man wrote:
Revelate wrote:
<snip>

FWIW -- It doesn't have to reduce defaults, it just has to help them improve pricing to reduce their overall loses. For example, help creditors put higher risk customers into more expensive products.

Agreed, in general, but in the deep sub-prime unsecured market, increasing the profitability of a porfolio is often either reducing defaults, or more cynically stated, pushing the date of default further into the future of the loan.

Pricing models are not sophisticated in this strata, and when you go looking at the lenders in this space, it's pretty much one size fits all on the APR's (three-digits....) though compared to the roughly 400% on PDL fees, it's an excellent deal. That's where I was looking at this score to be likely used and it's below the Capital One's of the world; typically anyone else only is going to offer secured products in this strata which in many cases obviates the need for this score anyway.

Edit: you may be right if the score provides better access for unsecured lending to no files, I just don't know how many people really exist other than dedicated cash-only folks who will get sorted in to the top in their new algorithm.

Re: Experian roles out new credit score

marty56 — Tue, 19 Jun 2012 10:53:13 GMT

My problem is that providing a score targeting subprime lending helps to add legitimacy to PDLs, Title Loan companies and the like.

What's next, a credit score for loan sharks?

Re: Experian roles out new credit score

Revelate — Tue, 19 Jun 2012 13:11:54 GMT

marty56 wrote:
My problem is that providing a score targeting subprime lending helps to add legitimacy to PDLs, Title Loan companies and the like.

What's next, a credit score for loan sharks?

Maybe, but in exchange it might add legitimacy for these people too in trying to get out of the PDL mess.

Some of the folks in this strata don't have a cash laying around, in many cases they're strapped for cash (there was a post here a bit ago about that specific situation): they can't pay the upfront deposit on any secured card or secured loan... getting an unsecured loan is really the only choice, and the options they do have are routinely snickered at by folks on this forum and others. OMG, 120% APR, why would you ever take that? There's severely limited paths, and it is far better than the 400% PDL structure.

These folks have no positive information in their files, and it's a challenge to get anything on there too. That said, there are paths that can be used to fix this (vis a vis Cashcall and their like) but there's limitations there but the rates are way lower than PDL fees and at least some of them report... on one of the three bureaus, probably why Capital One pulls all three on the hope they can get better resolution currently, they'd likely love this new model. Anyway, that's a foot in the door in FICO, and it's a LONG road refinancing down your debt as your credit score progressively increases.... we talk about 2-3 years to fix credit reports on this forum, it's probably close to double in their situation. Cash has to be used first to survive, $99 bucks even for the partially secured deposit at Capital One is a challenge, if they even know to go ask there for a card.

This score might be a good thing overall as a result. Yeah, for those of us with something useful in FICO's system, there's too many scores, there's too much confusion, why do we need yet another one? But for the people below that point, which FICO doesn't handle currently (no kidding their credit score sucks), this possibly can give folks a chance to drag themselves out of the financial mess they have by enabling more lenders to get down into that strata, and do it more cheaply and more effectively too as competition invariably reduces prices. I'm really all for that, there's no downside for me on that one, and this score isn't going to be used for me anyway and I'm nowhere close credit-wise to the pretty FICO people on this forum.

Re: Experian roles out new credit score

Revelate — Wed, 20 Jun 2012 01:13:44 GMT

Haha, and I thought Cashcall was high at 120ish percent. This came in the mail today: a flyer from Plain Green, another unsecured subprime lending company. It proudly proclaimed, 40% less interest rate than Pay Day Loans!

My cynical thought: "Great, it'll be 360% APR on this loan."

Fine print: 364% APR. Good grief.

Anything which makes lending resolution more precise so that other companies get down to the subprime lending market is going to be a win for America.

Re: Experian roles out new credit score

drkaje — Thu, 21 Jun 2012 16:22:27 GMT

"Underbanked", LOL!

Re: Experian roles out new credit score

Revelate — Fri, 22 Jun 2012 00:12:45 GMT

drkaje wrote:
"Underbanked", LOL!

Pretty certain that's a standard financial industry term these days, not kidding!

Re: Experian roles out new credit score

drkaje — Fri, 22 Jun 2012 01:35:49 GMT

Perhaps the "under banked" should rebuild, go with less credit a while, or whatever instead of going deeper in the hole with crazy scoring systems. When it goes south, we'll end up paying more for bailing out banks or about how this led to predatory lending.