@pipeguy wrote:IMO, based on a lot of research FICO is one in the same with CRAs, they are attached at the hip (bank account) working both (all) sides of the "racket'. As I said from the get go, I'm not a big fan of government regulation, but in the case of credit reporting and yes credit scoring, they system is broken as far as being a fair reflection of actual results (reports and or scoring). The current system is designed to make money off of every part of the process, fairness and correctness are hardly an after thought.
I disagree. FICO provides a service to lenders grading a customer for risk of default. They look at your report and say based on this info, we think this customer has a X% chance of default. We came up with that based on lots of criteria, but we think this customer might be particularly high risk right now because notwithstanding their prior good history, one of their accounts just posted 30 days late. FICO could be wrong, and the bank doesn't have to listen to them. A competing score model could come along which more accurately predicts risk and convince lenders that they would make more money by relying upon it (I'm sure Vantage, for example, probably makes this claim). But you want government oversight that tells Fair Isaac that they have to weight the information differently and/or that the banks can't rely upon Fair Isaac's assessment?
I think there are some serious problems with how difficult it can be to get inaccurate information removed from reports. But I don't have an issue with lenders using what is basically a consulting service to help them determine if they should make loans, and on what terms. It's no different than if you came to me and asked me for a loan and I said that I wanted my friend Steve to look at your credit report and tell me what he thinks. You may think Steve is a moron, but I have every right to ask his opinion before making the loan. The CRAs on the other hand shouldn't be able to publish false information about you.
Starting Score: ~500 (12/01/2008)
