Comments on: FICO’s new businesses http://blogs.reuters.com/felix-salmon/2010/02/20/ficos-new-businesses/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: GregFisher http://blogs.reuters.com/felix-salmon/2010/02/20/ficos-new-businesses/comment-page-1/#comment-12309 Mon, 01 Mar 2010 18:55:27 +0000 http://blogs.reuters.com/felix-salmon/?p=2659#comment-12309 Some Guy Told Me.

In 2008, when I asked FICO about its claim that employers use scores, a spokesman said that the company bases its claim on “anecdotal information gleaned from public sources such as published articles.”

Despite the consumer reporting agencies’ statements that they do not provide scores to employers, the agencies still claim that employers use scores. Media perpetuate and amplify the notion and scare the daylights out of consumers and legislators. Consumers buy the scores and legislators pass bills.

Here’s a quote from one of Experian’s vast array of websites:

“Credit scoring helps potential lenders, landlords, and employers quickly gauge an applicant’s credit history.”

]]>
By: Ulz http://blogs.reuters.com/felix-salmon/2010/02/20/ficos-new-businesses/comment-page-1/#comment-12274 Fri, 26 Feb 2010 21:15:07 +0000 http://blogs.reuters.com/felix-salmon/?p=2659#comment-12274 CreditKarma is NOT giving away a “version of the FICO score” as suggested in the comments. They’re giving away the TransRisk Score, which is a competing score built by TransUnion.

What I found to be concerning is the assertion that Greene makes that employers are using FICO scores. All three of the credit bureaus have gone on record, time and time again, as saying that they do NOT provide a FICO score or any other score along with the reports they sell for employment screening.

“FICO officially frowns on the fact that employers, landlords, and the like obtain access to individuals’ credit scores and use those scores as a proxy for that person’s general moral upstandingness.”

]]>
By: AnonymousChef http://blogs.reuters.com/felix-salmon/2010/02/20/ficos-new-businesses/comment-page-1/#comment-12156 Mon, 22 Feb 2010 15:27:54 +0000 http://blogs.reuters.com/felix-salmon/?p=2659#comment-12156 Felix –

I think your inability to see the uses of a FICO score comes from your lifestyle. You’re a proud renter, you’re not the type I would expect to be in the auto market in the near future, and I’d guess you’re the type of guy who, if he has a credit card, uses it only for the points and never carries a balance. And for that segment of the population, you’re largely correct.

It is also very tough to imagine paying for other companies’ scores, simply because at that point you’re limited to at most 10% of the market.

I don’t think its that hard to imagine a person for whom the FICO score (with the accompanying score simulator and comments) is worth $15, though. I’ve been that person several times over the past four years – when I bought my car, when I bought my house, when I was looking for a bar study loan, and when I was looking for a 0% credit card to transfer balances to.

That information lets you know what the market value of your debt is. It was empowering to talk to mortgage lenders knowing that the average person with my credit score had a 5.25% fixed rate. If you shop around by hiring a broker, it helps you know that he or she is honest (since there is an obvious moral hazard). If you shop around manually, it helps you know when you’ve done so enough (since you’ll generally be charged a hefty application fee to do so). If it saves you even an eighth of a point on your mortgage, its in the money.

Likewise, if you want a credit card, its really useful to know if the terms on the mailer you got are your market terms. (Especially since credit card companies are generally less willing to lend to people who seek out credit online, since it indicates desperation).

But with the comments and the score simulator that comes with the score, it also helps you reduce the cost of that debt by raising the score. It’ll tell you if you just need to wait for your accounts to be more mature – and you can save money by waiting to buy that house for another year. It’ll tell you if don’t have enough of a credit history to get a high score, and you can save money by getting a credit card for the points and demonstrating you can pay it down. Maybe it tells you that your score is being heavily weighed down by a maxed out credit card. (Which sounds obvious, except that Fair Isaac doesn’t collect interest rate data, so you can be penalized for paying down a non-maxed, higher rate card over a maxed out, lower rate card.)

Now, I’ll be the first to admit that the advice isn’t always terribly specific, but its worth $50 a year if you’re planning one of those purchases. And if nothing else, dropping your credit score and comments in the forums on Myfico.com can do a world of good.

]]>
By: david3 http://blogs.reuters.com/felix-salmon/2010/02/20/ficos-new-businesses/comment-page-1/#comment-12152 Mon, 22 Feb 2010 12:30:56 +0000 http://blogs.reuters.com/felix-salmon/?p=2659#comment-12152 http://www.creditkarma.com/

]]>
By: wcw http://blogs.reuters.com/felix-salmon/2010/02/20/ficos-new-businesses/comment-page-1/#comment-12148 Mon, 22 Feb 2010 07:24:25 +0000 http://blogs.reuters.com/felix-salmon/?p=2659#comment-12148 In re scoring, call the Creditkarma people, who are modeling and giving away a version of the FICO. I’d rather my credit union partnered with them than Fair Isaac, since the latter is to my mind suffers from the milktoast malevolence shared by all moderately incompetent monopolists.

In re analysis based solely on one side of the balance sheet, it’s worse than that: your FICO is based primarily on the history of a small subset of your income statement and on the current snapshot of a smallish corner of the liability portion of your balance sheet. If I were working for, say, Applied Underwriters as a statistical analyst (viz careerlink.com/0/4/7/2/po/004690f.htm) I would under no circumstances consider copying more than the tiniest, most obvious things from Fair Isaac.

Alas, precisely because Fair Isaac have been really great businesspeople, monopolizing this space and as noted expanding to new ones, people unfortunately do want to know their score. They also want to know all the stupid, inconsequential things that affect it. The sooner FICO dies a much-deserved death, the better, but until then, you want to max yours out. My current employer ran my FICO when I applied. ‘Nuf sed, hm?

]]>
By: MattF http://blogs.reuters.com/felix-salmon/2010/02/20/ficos-new-businesses/comment-page-1/#comment-12142 Sun, 21 Feb 2010 20:38:36 +0000 http://blogs.reuters.com/felix-salmon/?p=2659#comment-12142 Well, when I got my first mortgage in the late ’90s, not that long ago, I had to come up with documentation for -all- my income, -all- my assets, -all- my liabilities, -all- my bill payment records, the works. The current notion that all this is now dealt with by a single FICO score is just crazy.

]]>
By: oneupper http://blogs.reuters.com/felix-salmon/2010/02/20/ficos-new-businesses/comment-page-1/#comment-12140 Sun, 21 Feb 2010 19:05:46 +0000 http://blogs.reuters.com/felix-salmon/?p=2659#comment-12140 Any credit analysis which is based exclusively on one side of the balance sheet – the liability side, is bound to be flawed. FICO does exactly that.
If I tried that, I’d be an unemployed analyst very quickly.
Good job bringing this up, Felix.

]]>
By: Curmudgeon http://blogs.reuters.com/felix-salmon/2010/02/20/ficos-new-businesses/comment-page-1/#comment-12137 Sun, 21 Feb 2010 13:20:50 +0000 http://blogs.reuters.com/felix-salmon/?p=2659#comment-12137 Good advice, Felix. I have never known my credit score, and have no particular desire to. On those rare occasions when I need credit, it doesn’t seem to be an issue, and it doesn’t even seem like anyone puts in a request for it.

I know many people who treat their (FICO) credit score as a measure of their self-image, or as a competition to see who can have the “best” score. These attitudes are largely encouraged by the financial press, so it’s great to see someone finally questioning why we need to know it at all.

]]>
By: wolphkaat http://blogs.reuters.com/felix-salmon/2010/02/20/ficos-new-businesses/comment-page-1/#comment-12134 Sun, 21 Feb 2010 09:11:31 +0000 http://blogs.reuters.com/felix-salmon/?p=2659#comment-12134 Better yet just ask a sales rep what kind of financing you qualify for and while they are looking it up inquire as to what your credit score comes up as.

Maybe cheapness is a sense … -J. Seinfeld

]]>
By: JonHocut http://blogs.reuters.com/felix-salmon/2010/02/20/ficos-new-businesses/comment-page-1/#comment-12132 Sun, 21 Feb 2010 04:03:38 +0000 http://blogs.reuters.com/felix-salmon/?p=2659#comment-12132 If you’re planning to borrow for an auto purchase it’s helpful to know if you’re credit-worthy ahead of time so you can possibly decide to postpone the purchase while you increase your score by paying on time for a while or decreasing debt. Any auto salesman will tell you that many people come in to buy with no idea what a credit score even is or what kind of loan they should be able to qualify for.

]]>