FICO should release their formula

[marty56]

As another Classic Rock song said:

.. And if you're the only other person to know, dont tell me.

Now I know what was in the briefcase in Pulp Finction.

[Anonymous]

Yeah, and Coke will release their formula too.......

You people are dreaming....there would be no more myFICO if that happened.   While you may want that to happen, they aren't going to close their doors and liquidate the company just because people don't know every little thing......

[marty56]

I went to several car dealers yesterday with a printout of MyFICo scores to show the dealers.  Alhtough I didnt buy anything (lets just say me better half decided that I should keep my beat up truck for awhile)  They treated me way better then the l wast time I went in to buy the said truck when my credit wasnt exactly good.

My point is that the dealer looked at the printout and was able to know that I was a good risk without having to pull my credit at they time or take my word for it or look at a "score" from Marty'sFICO.com

[unknown_entity]

Unless you are a "well qualified buyer" and can take advantage of the 1-3% apr deals offered by the auto companies themselves, 99% of the time you are better off getting financing through your local bank or credit union.  Dealers have relationships with the financial institutions that service them and are given a "buy rate" for individual transactions and it's the finance and insurance managers job to make sure the difference between the "buy rate" and your "actual rate" is as large as possible.  This is called the "back end" of the deal and also includes any extended warranties or credit insurance added onto the deal. My advice is arrange financing BEFORE you go to the dealer.  Then you can concentrate on getting a good deal on the price of the car. 

Message Edited by unknown_entity on 03-30-2008 06:12 PM

[RobertEG]

I simply do not understand this thread at all.   Only Boscoe has posted with what I perceive as a business understanding.

Should FICO simply release their trade secret formula?  I laugh!  This argument is total anti-business, and illlogical.

I am an intellectual property (patent) attorney.  Busiinesses make the decision, every day, as to whetther to apply for a patent on their intellectual property/invention, or to keep it a proprietary trade secret.  That is the heart of capitalism. If you apply for a patent, you must give up full disclosure, in this case, of your algorithm.  In exchange, you get exclusive rights to block anyone from  using it for 17/20 years.  But after that, it is in the public domain, and anyone is free to make, use, and sell it.  Most inventions, once put on the market, are subject to immediate copying, so most businesses have little option other than to go the patent route.  But if you have an invention that is not subject to easy reverse engineerng, then you can get many more years of market advantage by keeping it a trade secret, and not disclosing it for the securement of only 17/20years of protection.  The most often cited example of this is Cocoa-Cola.  They took the chance, many years ago, that no one could reverse engineer their formula.  They havent, so it is still a valuable trade secret, worth much more to them than the requried public disclosure that would have been needed to get a patent, and made Coke a generic product after only 17 years.

A basic provision of patent law is that once you have put a product on the market for more than one year, you can never get a patent on it.  So indusstry makes the decsiion... patent or trade secret.

FairIsaac is a business.  There is no capitalistic reason why a busness who takes the risk of putting a product on the market, and giving up the future chance of patent protection, which FairIsaac has done, should then be vilified for not making its economic product free to others.

Capitalism may not by pretty, but it works

Do not vilify a company because it has a product that it does not want to give a blueprint for duplication to its competitors.

I sigh when I see posts that call for FairIsaac to give away its profits.  That aint the way capitalsim works.

Message Edited by RobertEG on 03-31-2008 10:35 PM

Message Edited by RobertEG on 03-31-2008 10:55 PM

Message Edited by RobertEG on 03-31-2008 10:57 PM

[Anonymous]

You bring up a very good point, Robert.

However, I think some of the posters are coming from the perspective that as lending (Sallie Mae, Freddie Mac, FHA, etc)  has for a long time been, and continues to become more and more of a government-regulated practice, it seems a little odd that the company (FICO) that sets the standards for how those government-regulated lenders will assess you is exempt from the same disclosure that the lenders who use their products are subject to.

It's like a state or national government regulating who can be a judge, but not stepping in and setting a publically available standard for how those judges make their rulings (eg, First Degree Murder is defined as a murder committed with XXXXX intent, etc)

-ivyalmighty

[RobertEG]

Hmm.  Good points.  But I dont think that any of the government-based, or even private, lendors are requried by law, to use FICO as the determining criteria for lending.  FICO is NOT a mandated standard by anyone.  Maybe accepted, due to its preceived value, but NOT mandated.  Fannie-Mae, for example,  announced more than a year ago that they were no longer pegging their decisions directly to FICO.  When we are taliking about high principal loans, I think that any loan officer will tell you that FICO is just a piece of the pie.  Debt to income (not a part of FICO), past residency history (not a part of FICO), family income (not a part of FICO), employment history (not a part of FICO), etc,  are all used.   It is only the lower principal, and thus lower risk, loans that lenders use FICO for a primary lending decision, in order to lower their credit investigation costs.  Sure, $300 CL cards may rely only on FICO, but they dont want the cost of developing their own algorithms or doing more extensive credt investigations.  Their business choice, not a FICO mandate,

But, regardless of the importance that any lender may choose to place on FICO, it is their lending choice, and not mandated by anyone, so is that a reason for disseminating a company asset by requiring them to give up their intellectual property?  I dont think so.

An interesting discussion.  I guess I am just a heartless capitalist in my black heart!  LOL!

Message Edited by RobertEG on 03-31-2008 11:10 PM

Message Edited by RobertEG on 03-31-2008 11:18 PM

[Anonymous]

you are so write my husband owns a car lot and the reports we see never make since with the score example a person came in today to get a car of course and we ran a credit check she had 3pages of collections and charge offs and her score was 551 not 1 good account it should have ben alot lower than that since most of it has ben this past year and from 1999 not one of them had ben paid that just does not make sense to me even though her score was in the 550s i would have thought it would have ben in the 300s.example someone else has credit cards a morgage no lates on morgage but some lates on the cards couple of 30day lates in 07 there score was 28points lower if i would not went over the report and just looked at the score we would have finance the wrong person were going with the person with the morgage this score stuff i can see is very bad i think its all about money because this is not for the consumer its about big money and big big business's banks are making a fortune over all this score stuff were is the FTC. i say not fair to the consumer they say keep your limits down under 50%or10% true but who does that benefit the credit card company's especially write now with our economy going and the dollar falling who runs this fico company and what do they stand for? not the people.the rules keep changing within there company after you fall can you really get back up to many rules by the time you really do pay collections and charge offs and maybe a bankruptcy they start the clock all over again who benefits from that?the big big companys that pay for all there scoring soft ware that all the big companys in this country  buy since fico is number one in the country for credit reporting and scoring.

[RobertEG]

This post continues to amaze me.

I see the many trees flowering on this post, but I dont see the forest. 

Let us all ban togehter, dissolve capitalism, and require CocaCola to release their secret formula????

Require FairIsaac to make their property right public?  Hummm.....

Then, after that, we can all hold hands, and skip down the yellow brick road to Oz, hand in hand with comrad Lenin.

Folks, like it or not, trade secrets are a valuable intellectual property right, just as much as a patent.  They are entiled to their intellectual property, and to require any business to give up their basis for their being is just not what capitalism is all about.

Message Edited by RobertEG on 04-09-2008 09:34 PM

Message Edited by RobertEG on 04-09-2008 09:39 PM

[Junejer]

Here, here Robert. Excellent points. I am part of a company who is the leader in its industry. While all of the "competition" would love to know the algorithm and be able to compete, they don't and they can't, so we continue to be the industry leader. Why should the algorithm be released, so that Joe Schmoe can duplicate it thus rendering our company generic or obsolete.