Bravo.
I do wonder what the longer term implications are going to be; I haven't seen many lenders state "This is the score we use for our credit decisions" in their verbiage of the scores offered, but does this open up others who don't label their scores as educational or as non-underwriting scores potentially? I'm thinking the lenders in this case might be subject to something similar?
@Anonymous wrote:
@Revelate wrote:Bravo.
I do wonder what the longer term implications are going to be; I haven't seen many lenders state "This is the score we use for our credit decisions" in their verbiage of the scores offered, but does this open up others who don't label their scores as educational or as non-underwriting scores potentially? I'm thinking the lenders in this case might be subject to something similar?
Hi Revelate,
I would tend to agree that most folks simply confuse the scores as being actual FICO scores, and likewise scores that lenders use. I think that everyone should be told up front if the scores that you are presented with are actual scores that a lender might be inclined to use. For example, I have even had employees at a local CU tell me that they highly recommend CreditKarma for the scores. I am like, what the heck? Even when a score is deemed to be "educational", the public does not even know what educational means. For example, "Oh they are educating me on my score!"
And then to top that off with the services offered by both EQ and Tu, who are main credit reporting bureaus, the consumer thinks that it must be right.
A few years ago, I even subscribed thinking the scores were actual scores that the lenders use. I only learned later by reading books on credit, and learning about the myFICO forums, that the exact opposite is the case.
I for one am happy for this, but on the flipside of the coin, I think that lenders also need to be educated themselves to tell the consumer what type of score that they actual use when running a credit check. I have been in a couple of banking institutions and asked what scoring model do you use and was told, we just run a credit check and the screen tells me.
In my opinion, we just need to know up front and not later- especially even more when we are paying our money.
I guess it is true, when they say, "Let the buyer beware."
Well, I've worked in some lending institutions and in one, there was only 1 person involved in making the decision as to which score was being used, 2 other people in the room at the time, but it happened that one of those sat in the cubicle next to me and turned out he was interested in credit cards and scoring too so I managed to weasel it out making me #4 out of something like 3000 employees.
It's a seriously limited number, and I will say information is controlled in most environments as internal fraud is a serious issue at many if not all lenders, and as such underwriting criteria often aren't fully disclosed and I'm not surprised CSR's aren't aware of it, that's a pretty high turn over job and a pretty niche piece of knowledge. I think the really unfortunate thing is that FICO Open Access isn't being used more... or maybe the lenders aren't using FICO scores as much (Chase) for AR's.