Re: Experian roles out new credit score
06-19-2012 06:11 AM
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.
Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 672, Wally TU 672, EX 662 (1/12/14)
Goal Score: 700 in all three (01/01/15)
Take the myFICO Fitness Challenge