Ready to file a class action suit against "Fair Isaac" system

[Anonymous]

I have had it with the "Fair Isaac" system, which is absolutely NOT fair.  My credit score was 785, then B of A decided to close an account that I had not used in a while, with no notice that I needed to use it or lose it.  Chase did the same within a couple of weeks.  I have NO late payments on my record.  My credit score plummeted to 650 because of the loss of my credit ratio.  My remaining accounts with Citibank saw immediate interest rate hikes because of the lower score. 

I have continued paying the Citibank cards, and my credit score has increased back to 735.  Last week, Citibank pulled a "random" credit report, and after 29 YEARS of credit history with NO late payments, they have decided to close my account because I no longer "meet their criteria".  Citibank had already raised my interest rate from 7% to 15% because of the "ratio change", now they are closing the account, but I still have to pay back the outstanding balance at the higher interest rates.

All of this has happened simply because I chose NOT to use some of my available credit.  NO late payments, NO judgements, NO collections.  This is getting out of hand.  This is one of my oldest credit histories, and will definitely have a negative impact when that long history is wiped out, through no fault of my own, except failure to use the available credit I had out there.  Is anyone else having these kinds of problems? 

[Anonymous]

I empathize with you.  It's definitely aggrevating and disappointing.  I also question the fairness of it.

I'm grateful that it hasn't happened to me.  However a little over a week ago when I bought a new truck, the salesman I purchased from spoke about multiple incidents in recent months where the dealership has seen this sort of thing happen.  Buyers with historically high FICO scores and no late payments or derogs arrive at the dealership and agree to purchase a vehicle.  The buyers are operating with the understanding that they have always had good credit then surprisingly they learn there is a problem with credit approval for their loan, or they don't qualify for the best loan rates. 

The car salesman indicated the stumbling blocks unsuspecting buyers have encountered are similar in nature to what you have written about.  They buyers were unaware that CLs had been lowered or closed accounts substantially lowered their FICO scores.  

[RobertEG]

I see your frustrations.  The credit scoring system is often deeply perplexing, and many feel is harmful to consumers

But as for taking legal action, I dont think so.  I am not jumping to the defense of the system, but only advise that I see no legal grounds to challenge it, whatsover, wthout a total rehaul of federal law.

Chase and BoA have the right, under the original account terms of agreement with you, to close your account with them, or reduce credit limits, just the same as they provide you had the right to not use, and if you had chosen, to close your account with them. They make their decisions based on their internal business decisions, probably not wanting to maintain an account that you made a business decision not to use, and they thus made a business decision that it was not very profitable..  Chase and BoA dont generate credit scores, and arent responsible legally for FICO scoring.

So then, consider the credit scoring companies (such as Fair Isaac) , who offer advice that their customers (the current and potential new creditors) may choose to use in their business decisions.  They are selling risk-analysis opinions that any creditor can purchase and use, purchase and not use, or not even purchase. 

They dont use income, age, race, total debt or assets, address, currrent employment, etc., in their score formulatiions, because they dont market them as a defintive analysis of your credit worthness.  They are careful not to violate federal discrimination stattues. Creditors make that decision, and may choose to wieigh FICO score in any manner they choose it making their lending decisions.

What FICO is is a risk analysis of your likelhood of making a late payment.

To even consider entering into legal action against a vendor of an intellectual property right (i.e., their trade secret algorithms for reaching their scoring analysis) would be at total odds to the entire 220-year construction of 35 USC 100, et seq.  which provides, just as Coca-Cola has done for a century, in keeping their trade secret business practices outside the realm of any court-ordered disclosure.

[Jazzzy]

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@Anonymous wrote:

All of this has happened simply because I chose NOT to use some of my available credit.  NO late payments, NO judgements, NO collections.  This is getting out of hand.  This is one of my oldest credit histories, and will definitely have a negative impact when that long history is wiped out, through no fault of my own, except failure to use the available credit I had out there.  Is anyone else having these kinds of problems? 

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Hi militarylife, and welcome to the forums.

If you do some reading here in the forums, you will learn that you are one of many. Unfortunately, this has happend quite a bit in this credit climate. Credit card companies decided to lower their risk and liabilities. They had to. One thing they looked at were folks who had high utilization on their cards or on cards from other companies. These companies had no idea who would lose their job next or who would run into financial difficulties (even after perfect histories)...so in many cases they targeted those who carried balances on other cards. They didn't want to take a risk with the credit they had given you, and they do have the right to pull it back. We have also seen cards closed for nonuse, but many times it has to do with the outstanding balances on their other cards.

Then, as you know, once you got an adverse action from one card, which raised your utilization percentage, it triggered adverse action from another. It sounds as if you have started to recover somewhat. It takes time...and it takes getting your card balances to zero.

Don't worry about "losing the history" of the card for now. Closed cards will remain on your reports for up to ten years. You will still have the positive history for many years.

[MidnightVoice]

There is now a "use it or lose" mentalitry around in the CCCs.  They don't see the point of having customers who do not use their cards.  You can replace those cards with others to get your utility down and score up.

I ensure every one of my cards is used every month - for utilities, charitable dinations etc.

And when I am actually purchasing something bigger, I rotate the cards so I use them all

[Imhotrodcrazy]

As I have always said, when it comes to credit, and everything associated with it, you're dammed if you do, and dammed if you don't.

[Anonymous]

Hi militarylife,

What was your utilization like on your other cards?  If you post some additional info, we may be able to help you discern better why this happened.  And perhaps some insight on how predictable it was/wasn't.

[llecs]

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Fair-Isaac-is-NOT-fair/m-p/636444

[Anonymous]

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@llecs wrote:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Fair-Isaac-is-NOT-fair/m-p/636444

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Well done.