Re: I Wish you could bribe Experian and the gang
11-03-2012 07:50 PM
I didn't mention the government taking control in anyway. What I meant to say was that if a single entity would make everything (data collection, analyzing, etc) then the scores wouldn't have to vary from lender to lender (ex. lender 1 pulls TU, lender 2 pulls EX).
I guess what I should of said was: to make an universal scoring model that we can access (paying or not, but we should have access to it..) so we can better plan when attempting to do a big purchase. This model could vary for different applications (car, mortgage, CC, installment loan, etc.) like it does now. What I want is just to have access to the score and it not varying between lenders (as long as the category is the same). Other than having some items weigh more than others (ex. having a late payment weigh more than age of the account on one report and vice versa on the other) I see no reason for the score to vary if it is the same information.
OR you could keep it the same as it is now, but give access to all 3 scores (including different versions if any), paying or not, (FICOs used for loan decision making, not FAKOs) that are actually used and make the lender/creditor reveal which version they are using or push just one official version. Basically make it constant across the board.
How are you going to do that? The CRAs are separate, private, competing companies. They charge lenders to submit information, and then sell that information back to lenders. A lot of large entities choose to report to all three, but smaller entities sometimes report to only one, or not at all. This is why you have different information on your three reports. To make the information consistent, you'd have to eliminate two of the CRAs, force each lender to report to all three, or force the CRAs to allow submission of information without charging for reporting (there would still be some administrative cost with reporting to all three so some small lenders might not choose to do so). I doubt EX and EQ are just going to decide to close shop so that TU can make all the money in the credit reporting business, and none of them are going to voluntarily choose to kill a revenue stream and allow reporting for free. Similarly, there are smaller companies that don't have the resources or choose not to spend them on reporting. So I don't see how you are going to change the whole system unless your are proposing enacting laws that force one of these things to happen.
And there are actually good reasons for scores to vary based on the same information. FICO isn't infallible. It just happens to be what is most widely used. But just because FICO says that you have a 15% chance of default doesn't mean they are right. Vantage might score the same report at an 8% default rate. Maybe they are closer to the truth. A competitor could come along with a model that more accurately predicts risk, thereby saving lenders money, and displace FICO. It's not likely to happen anytime soon, but I'm sure that's what Vantage wants to do.
We're actually very lucky that there is, for all intents and purposes, one basic score model that dominates. And that there's so much information out there about it. There could easily be more score models used by lenders. While that would make it a little more difficult for consumers, this product really isn't targeted at us. It's a product for lenders.
Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720
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