PART ONE
The Credit Scoring Site
A bleak account
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In the United States, a credit score is a number that summarizes information found on a person's credit report. The higher the number, the lower the risk of lending money to that person.

The most widely used credit score appears to be the Classic FICO score, a formula whose rights are owned by its creator, the Fair Isaac Corporation. The broad-based credit bureau risk score was first deployed in 1989 by Equifax under the name BEACON. Today, it is the lingua FICO in casual conversation, for mortgage loan evaluation by Fannie Mae and Freddie Mac, and it is even mentioned by name by the U.S. Department of Housing and Urban Development. Not only is the algorithm used in the primary, consumer market, it is a standard of quality of investment market instruments.

Scale and Range

As stated by Fair Isaac, the FICO score scale is 300 to 850, and thus, the range is 550 (technically, 551, if the two extremes are included). The reason for the peculiarly odd scale is, perhaps, to differentiate it from other credit scores—although the FICO's extreme success and ubiquity make that irrelevant. FICO sued a competitor over the idea of the 300-850 scale.

While the general FICO is a general purpose score, Fair Isaac sells other algorithms (formulas) for specific markets. Auto and credit card ("bankcard") score models by the company have their own, equally esoteric mumbers: 250 to 900. Closer still to a logical 0-1000 scale, the FICO NextGen is 150-950.

Within the basic FICO score realm, there are new and old versions ("models"), including FICO 8.

Consumer access

Before 2001, citizens had no access to their FICO score. The theory is an old one: A person who knows he is watched acts differently than he would otherwise. Merely asking for one's score was met with flat-out refusal. A victim of its own success, Fair Isaac relented, and, again with Equifax, provided the BEACON FICO to citizens. Access to the TransUnion (then Trans Union) version of the FICO followed the following year, 2002. And, completing the troika, Experian provided it in 2003, although that access ended in 2009.

Other credit score brands

With the national obsession in credit scores, Fair Isaac's competitors see a huge market for selling credit scores to consumers. Unfortunately, the players don't all have a contract. So, picking up the crumbs are FICO-exile Experian, selling its PLUS "educational" score from its home page, TransUnion providing VantageScore, and others. But, for consumers, since there is access to the favored credit score, there is not much of a point.

Improving one's credit score

Today, a decade after the release of the FICO to consumers, there are any number of resources to improve your credit score. Disclosures recently required by federal law provide insights to financial service applicants. Fair Isaac even maintains a forum for citizens to discuss credit scores and their many facets.

But perhaps the best–and certainly the most expedient–way to attempt to solve the mystery of your credit score is to use the FICO score simulators. While a small fee is required, they are the only known tool providing direct access to your credit report, credit score, reasons that it is not higher and suggestions to improve it. The simulators give a general suggestion for improvement, and allow you to submit what-if scenarios to determine the likely outcome of particular actions (i.e., what if I get another credit card, pay down a balance, pay off an account, miss payments, etc.).

The information available will only get a person so far, though. In this bleak landscape, even the average score is unknown to the public.

What is a good credit score?

What score it takes to get the best interest rate is the essential question, although some strive and stumble for the heights for vanity or sport. But a score is just a score—there is no good or bad unless you consider the extremes: 300 is definitely bad, and 850 is, to be sure, good. It is possible to have no score, too (if you have no credit history or one insufficient enough to score it).

So, good in this ranking system is in the eye of the one who holds the gold. Fortunately, to find out what that means, recent legislation created a fairer playing field between banks and consumers: Mandatory disclosures that provide information about a person's credit score used in the actual lending process include where the person stands in relation to the population, who provided the score and, of course, the score itself. It's not perfect and took too long to happen, but it's a start.

December, 2012


Credit Score News and updates

All the messy details, year-by-year, in black and white, but mostly gray. First communication with inside the bunkers, 1997. A strange history of a secret credit report score, and then, Superbowl advertising.

Blog

2012

11/26 - Who changed the name of our Consumer Financial Protection Bureau?
10/30 - Halloween, 2012: What is a credit rating?
10/29 - The President: Credit score can affect chances of getting job (but CFPB says CRAs don't sell scores for that)
10/02 - London publishing house hype
8/03 - Canada Day, 2012: Reuters falls for math myth, moth-to-flame
5/10 - Average credit scores by state
5/01 - Evidence that Rupert Murdoch is unfit
4/12 - Talk back to your screen (and, if that doesn't work, take the train to see those people)
2/02 - Groundhog Day, 2012: Wikipedia - Jimbo vs. Cookiehead, and what the editors learned over the past year

2011

7/27 - Canada Day: Reuters, FICO and the employers myth
4/25 - National Financial Literacy Month: Employers using credit scores myth (video)
3/17 - St. Patrick's Day: VantageScore malarkey
2/21 - Presidents Day: FLEC
2/14 - Valentines Day: Fair Isaac
2/02 - Groundhog Day: Wikipedia

2010-1998 updates


Credit Score Information Highlights

Credit scores in employment
Believers and Nonbelievers. Which side are you on?

What is a credit score?
Definitions of the term credit score.

The Credit Score Blog
See The Credit Score Blog and The Credit Score Blog RSS 2.0 feed, supplements to this website.

FREE FICO credit score
Unadvertised web site where you can can no longer get your FICO credit score for nothing. Free. Zip. Zilch. Nada. Goose egg. Zero. Seriously. No kidding.

Get your credit score. Get the FICO score.
Byzantine, ambiguous, confusing. Hucksterism: The Fake-O flim-flam. The very few ways to get the authentic FICO score— the one lenders use most often. Score simulators. AnnualCreditReport.com, the official site for the federally-mandated free credit report. FCRA FACT ACT credit score price. Congress follows up on the progress of implementing the latest law. Price comparison. Not a sales pitch.

Improve your score
PhD not required. Pay on time and don't over-extend. Horse-sense and the simulators. Links to advice on improvement from the scoring company, itself, the national credit reporting agencies (credit bureaus; consumer reporting agencies), GSEs Fannie Mae and Freddie Mac, real estate agents, the federal government, consumer advocates and the press.

The FICO score
The main credit score. The one lenders use. Definition of FICO score. What it, actually, predicts. Its prominence. Its prevalence in mortgage lending. Fair Isaac and the credit bureaus' battle to keep the credit rating secret and the law federal legislators passed that allowed a decade of secrecy. Names: BEACON, EMPIRICA, FICO Risk Score/Classic. The 50 million with no risk score. Key to a better credit score and long-term success: Gaze into the middle distance and increase your savings. FICO fun facts.

What is the credit score rating scale and range?
Fun with numbers. Credit scoring company contradicts itself. The medallion. Grand, inaccurate proclamations of the scale by various characters treating it like a readheaded stepchild. A real hoot.

What is a good credit score?
Folly. Varied opinions from far and wide: Fannie Mae, Freddie Mac (aren't those just the cutest names for big, important, esteemed companies?), regulators, government, industry, experts, journalists, consumer groups, academia, non-profits, car dealers, blowhards.

What is the average?
Hard to explain with Fake-Os littering the market-- quite a hoax. The 678 credit score myth. FICO score distribution. Groundhog Day. Median (723) vs. mean. Scores in the secondary mortgage market. 13% have an 800+.

FICO score factors
What's in the sausage? The official list and the more complete unofficial list.

Credit checks (inquiries to a credit file; pulling a credit report)
The effect of a mere inquiry-- somebody performing a check of your credit record (for instance, a lender accessing your credit report). The special treatment of mortgage-related and auto-related inquiries. FICO company bows to pressure and adjusts its formula. Consumer fear of score dropping by hopping around shopping with no stopping and lenders popping in on their credit report and bopping their credit score; whether to fret about it or not.

Perspective
How credit scores work. What they are, who creates them, who sells them, and a short history. Contracts that prohibited consumers from getting their credit scores. The one, prominent brand, and other, far less successful ones. Media impact— for better or worse. Government-sponsored enterprises and government response to startling saving statistics. Saving: Not only a significant factor in loan approvals, but a missing crucial personal finance component that gives consumers a way to make it through a calamity without damaging their credit scores.

Other scores
Would-be competitors of the omnipotent FICO. Other scores for other uses. Marketplace confusion. Fake-O FICO Funk.

Letters to credit bureaus
A year of correspondence about secret credit scores.

"Check out the web site http://www.creditscoring.com/letters/equifax.htm for some interesting reading." - a Federal Reserve Bank vice president

Press releases
The quick story. creditscoring.com beginnings.

Media influence: Lying
Suggestion to ask creditors to lie to credit bureaus: The so-called "goodwill adjustment." CBS, MSN, Dow Jones, et al. Anarchy. West Virginia Attorney General's office falls for it, too.

Wikipedia
Wikipedia's errors regarding credit scores. Rumors and the source of the misunderstandings. Fake-O 678 myth. Consumer reporting agency. One year of misinformation.

Influence: Media, Search engines
What to believe, and what not to believe. Yahoo!'s score: F, 40%. Google's score: F, 40%. MSN Live Search's score: F, 30%.

History of getting your credit report score
You couldn't always just jump online and download them. In fact, you couldn't get them at all. Consumer reporting agency Equifax releases BEACON in 2001. TransUnion 2002. Experian 2003. Before that, in defiance, E-LOAN released FICO scores— only to have its credit report service shut off for doing so. 2001 email from E-LOAN.

Mortgage loans and credit scores
Lending guidelines, Fannie Mae, Freddie Mac, mortgage insurance.

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