References: 1
10/28/97
Robert M. Cutrone
Vice President, Consumer Affairs
Equifax
Subject: Message to Pete Thayer
Date: Tue, 21 Oct 1997 10:26:50 -0400
From: Greg Fisher (gfisher
erinet.com)
To: dave.mooney@equifax.com
Mr. Mooney:
I spoke with Mr. Thayer. He told me to use your email address to
contact him.
10/21/97
Mr. Thayer:
To attain the highest credit score (in the score Equifax produces for
conventional mortgage loan underwriting, the "Beacon"), how can I tell
what is the right "number of revolving bank accounts"?
And, how do I attain the highest possible score?
What is the highest possible score?
--
Greg Fisher
Cadillac Owner (1978 Eldo)(Red)
Gary Poch wrote:
>
> Mr. Greg Fisher -
>
> Point scoring models take into consideration many variables. There is no
> right or wrong number of revolving bank accounts or any other type of
> accounts.
>
> A highest score does not exist. All scores are relative to one another. Each
> Equifax business customer decides what score to use on a particular situation.
> These customers determine what an acceptable range of scores is for them.
>
> If you have any additional questions please contact us at 800-836-7703 and a
> representative will be glad to assist you.
>
> Peter Thayer
Mr. Cutrone:
The representatives at the telephone number 800-836-7703 did not answer
my questions.
I understand that one reason an Equifax Beacon score may not be at its
highest is that the credit report has too few or too many bank revolving
accounts. Please correct me if I am wrong.
To attain the highest credit score (in the score Equifax produces for
conventional mortgage loan underwriting, the "Beacon"), how can I tell
what is the right "number of bank revolving accounts"? Can you, at
least, tell me how I can tell how many to add or subtract to avoid the
Beacon score giving that as a reason the score is not higher? If it
says, "too few," do I add one? Two? Five? Ten? 463?
And, how do I attain the highest possible score? To clarify, using Mr.
Thayer's logic: how do I attain the highest possible score "relative to
all other scores"? I presume he means relative to all other persons'
credit reports.
What is the highest score? Or, what is the highest score anyone has
ever attained?
--
Greg Fisher
Cadillac Owner (1978 Eldo)(Red)
Subject: [Fwd: [Fwd: Re: Equifax]]
Date: Tue, 11 Nov 1997 00:01:52 -0500
From: Greg Fisher (gfishererinet.com)
To: bill.gastel@equifax.com
Mr. Gastel:
Will you respond?
--
Greg Fisher
Cadillac Owner (1978 Eldo)(Red)
Subject: Re: [Fwd: [Fwd: Re: Equifax]]
Date: Tue, 11 Nov 1997 13:32:55 -0500
From: bill.gastel@equifax.com
To: gfishererinet.com
Mr. Fisher, no, I do not plan on responding via the Internet but would be
glad to discuss with you should you wish to give me your phone number or
you may call me at 404-885-6039. I do not believe that I can add anything
to what Mr. Poch has already told you, but I will be happy to speak with
you.
gfishererinet.com on 11/11/97 12:01:52 AM
Please respond to gfishererinet.com
Subject: Re: [Fwd: [Fwd: Re: Equifax]]
Date: Wed, 12 Nov 1997 06:15:19 -0500
From: Greg Fisher (gfishererinet.com)
To: bill.gastel@equifax.com
References: 1
bill.gastel@equifax.com wrote:
>
> Mr. Fisher, no, I do not plan on responding via the Internet but would be
> glad to discuss with you should you wish to give me your phone number or
> you may call me at 404-885-6039. I do not believe that I can add anything
> to what Mr. Poch has already told you, but I will be happy to speak with
> you.
William Gastel, Senior Vice President, Operations
Equifax
P O Box 4081
Atlanta, Georgia 30302
Mr. Gastel:
Before calling, I'll submit this information to you so our conversation
has a basis.
In my discussion with Mr. Cutrone, he told me "there is no right number"
of bank revolving accounts to have to achieve the highest credit score
known as the Beacon.
He said that I could eliminate the reasons: "too few", or "too many bank
revolving accounts" and something else "might come up as a reason." I
know that. That's an answer to a question I did not ask.
Again, the question is: how can I tell how many to eliminate or add to
avoid that being a listed reason that the score is not higher? Logically, there is an answer in the form of a number. And, yes, I
understand the symbiotic relationship between all the data on a credit
report. But I have isolated one of your "reason codes" on which to base
my question. So, assuming everything else on the credit report remains
the same, and at a given point in time (so the passage of time is not a
factor), it is possible to arrive at that number.
Mr. Cutrone went on to say that he didn't feel obliged to "sit down and
discuss and explain how credit scoring and our [your] models work."
Again, I didn't ask for that. Just the answer to the simple questions I
posed.
When I asked how to get the highest possible score, Mr. Cutrone said he
didn't know "if there was such a thing." I told him that Fair, Isaac
told me that the highest was 900. He said, "And it might be."
That's one reason I am contacting you, his superior. He did not know.
If he did not know that, it is reasonable to assume that he doesn't
really know "how credit scoring and our [your] models work."
He also did not know what the highest score ever attained is.
When I asked who at your company knew that, he said he knew the answer
to a lot of my questions, but said that the information was
"proprietary" and that I was asking for how your models work.
In the case of many of the other reasons listed on credit reports (those
relating to derogatory listings), the action to take is obvious. For
instance the resolution to the existence of delinquent payments,
bankruptcy, or collection accounts is simple.
But the subtlety of how many "bank revolving accounts" to have, or how
high to keep a balance on a credit line is not clear. But, once again,
I am not after the latter. However, that is a portion of your algorithm
I encourage you to explore, to the end of giving the public a higher
understanding.
I told Mr. Cutrone that nobody can tell me how many bank revolving
accounts to add to get the highest score.
He said that if that were my concern, or if having too many was a
concern, then I should close some of the credit lines.
I asked if I should cancel one, and wait for sixty days until the new
score comes out, and then I would know what kind of affect it has (so I
can tell if I canceled enough).
He said, "If you choose to do that, you can do that."
It is a guessing game. But not according to Mr. Cutrone who stated that
he wouldn't "talk academics" with me.
Indeed, he said you're not running a game show, but rather, evaluating
risk, and that you're not trying to have people achieve the highest
score.
Finally, when I stated that I didn't want to give my telephone number,
he said, "Well, I understand that, but you want me to give you
proprietary information, but you don’t want to give me a simple thing
like a phone number."
Did he mean that if I gave you my telephone number, you would release
the formula? I didn't ask for that, but if you are offering it, I'll
take it.
Mr. Cutrone was helpful on his level. Please express my thanks.
Here are the questions again:
To attain the highest credit score (in the score Equifax produces for
conventional mortgage loan underwriting, the "Beacon"), how can I tell
what is the right "number of bank revolving accounts"? Can you, at
least, tell me how I can tell how many to add or subtract to avoid the
Beacon score giving that as a reason the score is not higher? If it
says, "too few," do I add one? More than one?
And, how do I attain the highest possible score?
What is the highest score? Or, what is the highest score anyone has
ever attained?
I will call you.
--
Greg Fisher
Cadillac Owner (1978 Eldo)(Red)
Wednesday, November 19, 1997 - Call to William Gastel, Senior Vice President Operations?), Equifax 404-885-6039
WG: Bill Gastel.
GF: Mr. Gastel, Greg Fisher.
WG: How are you Mr. Fisher?
GF: I'm fine thanks. (long pause) Ahm, did you have any responses to my e-mail I sent you last time?
WG: Ah, again, the only response I can give you is that I cannot identify what you want to know. I mean, I don't know the algorithms that control, ah, the score.
GF: Mm-hm.
WG: Um, it's proprietary information and we wouldn't give it out. And what you're asking for, I—I don't, I mean, I--the answer that you got from Gary, I think, was pretty much, uhm, the answer that you're going to find from anybody that you ask at Equifax.
GF: Mm-hm. Ah…
WG: There is no such thing as a perfect score, I—I don't know how you would do that. And, no, I don't know what you would remove or delete or add in order to create it.
GF: There is no such thing as a perfect score, but the highest score is a 900?
WG: No, no, I-I'm not saying that there isn't such a score—that you couldn't, I mean, that there, that 900 isn't the highest.
GF: Mm-hm.
WG: I'm saying I don't know how to create it.
GF: Mm-hm.
WG: I could not tell you that.
GF: O.K., um, and… if… the reason codes at the bottom of a credit report say that I have too few or too many bank revolving accounts, you can't tell me how I can tell how many to add or subtract?
WG: No, I can't tell you that. I-I'm sure… ah… that possibly a statistician who created the algorithm could do that. Uhm, ah, you know, I'm not going to tell you that's not impossible to do.
GF: Mm-hm.
WG: Ah, but I believe that there'd be a tremendous amount of variation that would, ah, you know make changes for… every bit… whether you added something or deleted something.
GF: Right.
WG: I mean, and I don't know how somebody's going to explain all that to you. And I also don't know why you—you—you… I mean, I-I don't know why you want to know that. But I, you, you know, (laughs) I don't know how that's going to benefit you.
GF: Ah, just simply so I can have the highest score so that I can get the best rates and so that my… credit applications go smoothly and… that they're approved at all.
WG: Well…
GF: Doesn't that make sense to you?
WG: Y-Y-Y-Yeah, I guess it does to some degree. But, I-I-I will tell…
GF: To what degree?
WG: To what degree, what? I mean, eh, ah, eh, what-what, as long as they're approved, why do you care?
GF: Uhm, I have…
WG: Uh, uh, are you—uhp, are they being declined? Then that obviously is-is a problem. If they're not being declined, then, you know…
GF: Have you heard of variable, ah, pricing based on credit scoring?
WG: Pardon?
GF: Have you heard of va…
WG: Yes, I have…
GF: … riable pricing?
WG: Yes, I have. But I-I-I…
GF: That's why I want to know, then. You asked.
WG: Un-un-un… O.K… unfortunately, I cannot provide that to you.
GF: Mm-hm. You say it's proprietary information.
WG: That's correct.
GF: Proprietary-
WG: Our scores are. Yes.
GF: Mm-hm.
WG: I'm not talking about all scores; I d—I can't speak for… ah… other companies; I don't know. Fair, Isaacs obviously has a score, and, I-I would imagine they would consider that to be proprietary information.
GF: Fair, Isaac has a score? They are responsible for producing your Beacon, though, isn't that correct?
WG: Yes, they do, but they have not written all the information that-that goes into that.
GF: I see. O.K., uhm, I'm still at a loss though, uhm, because nobody can tell me if a reason code says I have to few or too many bank revolving accounts, I don't know how many to add or subtract in order…
WG: Well, I don't know how…
GF: … to optimize my credit score.
WG: I-I would not know how to uhm, tell you, that you're going to be-ever be able to find that out.
GF: Yeah, you said that.
WG: And if you're able to do it with Equifax, are you going to be able to do it with any other company; and how are you going to know what credit company that particular grantor is going to choose? I-I would imagine that, uh, TransUnion and-and Experian have similar models.
GF: For conventional underwriting, uh, three are required… conventional mortgage loan.
WG: That-then you're talking about…a, ah…a, ah
GF: A FannieMae/Freddie Mac qualified mortgage loan
WG: … a blended—a blended or a merged report.
GF: Yes. One that has three credit scores, ea…, one from each national repository.
WG: Right. Well, I-I-I… believe me, I wish I could help you, but unfortunately, I can't.
GF: Mm-hm, yeah, that's obvious. Uhm, s-- and you're saying that no one in your organization can.
WG: No one—not only—not only can they—not only can't they, they will not, to the best of my knowledge.
GF: Mm-hm. O.K. Um, who's your supervisor?
WG: My supervisor is the president of the company.
GF: And his nam…
WG: … and he is not going to discuss this with you.
GF: And…
WG: I guarantee it.
GF: Did you already talk to him about it?
WG: No, but I will… as soon as I hang up, and I guarantee you he won't talk with you about it.
GF: And his name is Mr. Rogers?
WG: His name is Mr. Rougeou.
GF: Can you spell it?
WG: No.
GF: (laughing) What's his first name?
WG: You don't need to know that because I-you're not going to speak with him.
GF: Well, I'd simply like to write him a letter.
WG: Well, you can write me the letter.
GF: Mr. Gastel, what are you hiding?
WG: I'm not hiding anything Mr. Fisher. You are becoming a pain in the neck to Equifax and I am not going to let this go any further. O.K., you've contacted enough people; we've responded, I think, to the best of our ability, and now it's getting to the point where I don't believe it's necessary to go any further. So, if you want to write any letters to us, please be kind enough to write them to me. If you write them to somebody else, it doesn't matter, they're going to end up on my desk anyhow, for the most part. So…
GF: I see. Would you be willing to give me the name of the board of directors?
WG: I would be g… willing to give you nothing else.
GF: My. Well, I'm sorry to bother you, Mr. Gastel, I'm sorry you feel that way.
WG: I-I'm sorry that you seem to be on this mission.
GF: Why are you sorry?
WG: Mr. Fisher--good-bye. (hung up).
Called Equifax main number (404-885-8000) to get this:
John Rougeou, Executive Vice President & Group Executive
Equifax
1600 Peachtree Street
Atlanta, Georgia 30309
Subject: Credit Scoring
Date: Fri, 21 Nov 1997 10:15:04 -0500
From: Greg Fisher (gfishererinet.com)
To: bill.gastel@equifax.com
Mr. Gastel:
I called Mr. Rougeou's office, but they said there is no e-mail address
I can use to contact him. Please forward this to him; I will send a
copy in the mail.
Thank you.
John Rougeou, Executive Vice President & Group Executive
Equifax
1600 Peachtree Street NW
Atlanta, Georgia 30309
William Gastel was unable to answer my questions.
Here are the questions again:
To attain the highest credit score (in the score Equifax produces for
conventional mortgage loan underwriting, the "Beacon"), how can I tell
what is the right "number of bank revolving accounts"?
Can you, at least, tell me how I can tell how many to add or subtract to
avoid the Beacon score giving that as a reason the score is not higher?
If it says, "too few," do I add one? More than one?
And, how do I attain the highest possible score?
What is the highest score? Or, what is the highest score anyone has
ever attained?
--
Greg Fisher
Cadillac Owner (1978 Eldo)(Red)
Subject: [Fwd: Credit Scoring]
Date: Wed, 26 Nov 1997 10:00:39 -0500
From: Greg Fisher (gfishererinet.com)
To: bill.gastel@equifax.com
Mr. Rougeou:
When will you respond?
--
Greg Fisher
Cadillac Owner (1978 Eldo)(Red)
Subject: Credit scoring
Date: Wed, 03 Dec 1997 09:10:16 -0500
From: Greg Fisher (gfishererinet.com)
To: weber@equifax.com
Thomas F. Chapman
President and Chief Operating Officer
Equifax
Dear Mr. Chapman:
Please respond to the questions below. Mr. Gastel was unable to answer
them. After e-mail messages November 21, November 26, and a letter
through the U.S. Mail November 29 to Mr. Gastel's supervisor, Mr.
Rougeou, I have not heard from Mr. Rougeou. When I called today to
speak to Mr. Rougeou, his assistant said he was unavailable. She would
not give me his supervisor's name.
Thank you.
**********
Subject: Credit Scoring
Date: Fri, 21 Nov 1997 10:15:04 -0500
From: Greg Fisher (gfishererinet.com)
To: bill.gastel@equifax.com
Mr. Gastel:
I called Mr. Rougeou's office, but they said there is no e-mail address
I can use to contact him. Please forward this to him; I will send a
copy in the mail.
Thank you.
John Rougeou, Executive Vice President & Group Executive
Equifax
1600 Peachtree Street NW
Atlanta, Georgia 30309
William Gastel was unable to answer my questions.
Here are the questions again:
To attain the highest credit score (in the score Equifax produces for
conventional mortgage loan underwriting, the "Beacon"), how can I tell
what is the right "number of bank revolving accounts"?
Can you, at least, tell me how I can tell how many to add or subtract to
avoid the Beacon score giving that as a reason the score is not higher?
If it says, "too few," do I add one? More than one?
And, how do I attain the highest possible score?
What is the highest score? Or, what is the highest score anyone has
ever attained?
--
Greg Fisher
Cadillac Owner (1978 Eldo)(Red)
**********
Sincerely,
--
Greg Fisher
Cadillac Owner (1978 Eldo)(Red)
Subject: Re: Credit scoring
Date: Wed, 3 Dec 1997 11:32:32 -0500
From: customer.care@equifax.com
To: gfishererinet.com
The highest score in numbers for Beacon is about 850. We are unable to
advise you on what to do to increase your Beacon score. There are a few
things to keep in mind.
More important than any "scoring" is the accuracy of your credit file. All
items on you file may affect a credit grantors decision. If any item on
your file is incorrect then that also may affect your "score".
Each credit grantor has there own criteria for granting or denying credit.
Their criteria is how the score is derived based on credit file information
and any external information provided by you or gathered by the company you
applied with. So we cannot state whether open additional accounts or
closing others will increase you score with the company you have currently
applied with.
The reasons supplied by the company are the only information that is
available as to why you were unable to get a loan or credit with that
company and would be the only guide if you are still wanting to do business
with them.
I would suggest asking you lender or mortgage underwriting what they are
looking for in regards to your file. They have stated you have too few
revolving accounts so it would be best to ask them. We do not have access
to each companies criteria or the circumstances of the loan; i.e.
collateral, down payment, income.
Thank you
gfishererinet.com on 12/03/97 09:10:16 AM
Please respond to gfishererinet.com
Subject: Re: Credit scoring
Date: Thu, 04 Dec 1997 11:37:36 -0500
From: Greg Fisher (gfishererinet.com)
To: customer.care@equifax.com
References: 1
Thomas F. Chapman
President and Chief Operating Officer
Equifax
Thank you for your answer, Mr. Chapman.
You answered a question I didn't ask. I didn't ask you to interpret
lenders' decision criteria. I specifically asked about the "Beacon"
score. Further, my file is accurate. As you have said that accuracy is
more important, I can say scoring is more so. It is subjective.
One of your "reason codes" you state on your credit report about a
consumer, for conventional mortgage loan underwriting, that your Beacon
is not higher is that your report has too few, or too many bank
revolving accounts. The lender is not in control of your Beacon or your
criteria you use to calculate your Beacon. Please correct me if I am
wrong.
You said you are unable to advise me on what to do to increase your
Beacon score about my credit. If that is the case, then the reason
codes are useless to the consumer or any advisor to the consumer.
I conclude not that you are unable to advise me, but that you are
unwilling.
Thank you for your time.
--
Greg Fisher
Cadillac Owner (1978 Eldo)(Red)
Subject: Re: Credit scoring
Date: Thu, 04 Dec 1997 11:50:36 -0500
From: Greg Fisher (gfishererinet.com)
To: don.memberg@equifax.com
References: 1 , 2
Mr. Memberg:
Please forward this message to C.B Rogers.
Thank you.
**********
C.B. Rogers, Jr.
Chairman
Equifax
Dear Mr. Rogers:
Thomas F. Chapman was unable or unwilling to answer my questions. Our
correspondence is below.
Please respond to these questions.
To attain the highest credit score (in the score Equifax produces for
conventional mortgage loan underwriting, the "Beacon"), how can I tell
what is the right "number of bank revolving accounts"?
Can you, at least, tell me how I can tell how many to add or subtract to
avoid the Beacon score giving that as a reason the score is not higher?
If it says, "too few," do I add one? More than one?
And, how do I attain the highest possible score?
Thank you
Sincerely,
--
Greg Fisher
Cadillac Owner (1978 Eldo)(Red)
**********
Greg Fisher wrote:
>
> customer.care@equifax.com wrote:
> >
> > The highest score in numbers for Beacon is about 850. We are unable to
> > advise you on what to do to increase your Beacon score. There are a few
> > things to keep in mind.
> >
> > More important than any "scoring" is the accuracy of your credit file. All
> > items on you file may affect a credit grantors decision. If any item on
> > your file is incorrect then that also may affect your "score".
> >
> > Each credit grantor has there own criteria for granting or denying credit.
> > Their criteria is how the score is derived based on credit file information
> > and any external information provided by you or gathered by the company you
> > applied with. So we cannot state whether open additional accounts or
> > closing others will increase you score with the company you have currently
> > applied with.
> >
> > The reasons supplied by the company are the only information that is
> > available as to why you were unable to get a loan or credit with that
> > company and would be the only guide if you are still wanting to do business
> > with them.
> >
> > I would suggest asking you lender or mortgage underwriting what they are
> > looking for in regards to your file. They have stated you have too few
> > revolving accounts so it would be best to ask them. We do not have access
> > to each companies criteria or the circumstances of the loan; i.e.
> > collateral, down payment, income.
> >
> > Thank you
> >
> > gfishererinet.com on 12/03/97 09:10:16 AM
> >
> > Please respond to gfishererinet.com
> >
> > To: weber@equifax.com
> > cc: (bcc: Customer Care/Technology/Equifax)
> > Subject: Credit scoring
> >
> > Thomas F. Chapman
> > President and Chief Operating Officer
> > Equifax
> > Dear Mr. Chapman:
> > Please respond to the questions below. Mr. Gastel was unable to answer
> > them. After e-mail messages November 21, November 26, and a letter
> > through the U.S. Mail November 29 to Mr. Gastel's supervisor, Mr.
> > Rougeou, I have not heard from Mr. Rougeou. When I called today to
> > speak to Mr. Rougeou, his assistant said he was unavailable. She would
> > not give me his supervisor's name.
> > Thank you.
> > **********
> > Subject: Credit Scoring
> > Date: Fri, 21 Nov 1997 10:15:04 -0500
> > From: Greg Fisher (gfishererinet.com)
> > To: bill.gastel@equifax.com
> >
> > Mr. Gastel:
> > I called Mr. Rougeou's office, but they said there is no e-mail address
> > I can use to contact him. Please forward this to him; I will send a
> > copy in the mail.
> > Thank you.
> >
> > John Rougeou, Executive Vice President & Group Executive
> > Equifax
> > 1600 Peachtree Street NW
> > Atlanta, Georgia 30309
> > William Gastel was unable to answer my questions.
> > Here are the questions again:
> > To attain the highest credit score (in the score Equifax produces for
> > conventional mortgage loan underwriting, the "Beacon"), how can I tell
> > what is the right "number of bank revolving accounts"?
> > Can you, at least, tell me how I can tell how many to add or subtract to
> > avoid the Beacon score giving that as a reason the score is not higher?
> > If it says, "too few," do I add one? More than one?
> > And, how do I attain the highest possible score?
> > What is the highest score? Or, what is the highest score anyone has
> > ever attained?
> > --
> > Greg Fisher
> > Cadillac Owner (1978 Eldo)(Red)
> > **********
> >
> > Sincerely,
> > --
> > Greg Fisher
> > Cadillac Owner (1978 Eldo)(Red)
>
> Thomas F. Chapman
> President and Chief Operating Officer
> Equifax
>
> Thank you for your answer, Mr. Chapman.
>
> You answered a question I didn't ask. I didn't ask you to interpret
> lenders' decision criteria. I specifically asked about the "Beacon"
> score. Further, my file is accurate. As you have said that accuracy is
> more important, I can say scoring is more so. It is subjective.
>
> One of your "reason codes" you state on your credit report about a
> consumer, for conventional mortgage loan underwriting, that your Beacon
> is not higher is that your report has too few, or too many bank
> revolving accounts. The lender is not in control of your Beacon or your
> criteria you use to calculate your Beacon. Please correct me if I am
> wrong.
>
> You said you are unable to advise me on what to do to increase your
> Beacon score about my credit. If that is the case, then the reason
> codes are useless to the consumer or any advisor to the consumer.
>
> I conclude not that you are unable to advise me, but that you are
> unwilling.
>
> Thank you for your time.
>
> --
> Greg Fisher
> Cadillac Owner (1978 Eldo)(Red)
Subject: Re: Credit scoring
Date: Thu, 4 Dec 1997 13:37:42 -0500
From: customer.care@equifax.com
To: gfishererinet.com
You Wrote:
>You answered a question I didn't ask. I didn't ask you to interpret
>lenders' decision criteria. I specifically asked about the "Beacon"
>score. Further, my file is accurate. As you have said that accuracy is
>more important, I can say scoring is more so. It is subjective.
You are correct scoring is in fact subjective. The same credit report
shown to 3 separate companies all using Equifax can generate a different
score based on each companies criteria. You may review our website at:
http://www.equifax.com/consumer/faqs/credit/faqtxt_b.html
You Wrote:
>One of your "reason codes" you state on your credit report about a
>consumer, for conventional mortgage loan underwriting, that your Beacon
>is not higher is that your report has too few, or too many bank
>revolving accounts. The lender is not in control of your Beacon or your
>criteria you use to calculate your Beacon. Please correct me if I am
>wrong.
We are a credit reporting agency. We do not grant credit. Therefore we
are not making decisions on whether a company grants or denies credit to
you. The Beacon score is a product provided by us for the credit grantor
to enter THEIR criteria for granting credit. With all due respect you are
incorrect in saying "The lender is not in control of your Beacon or your
criteria you use to calculate your Beacon." the lender in fact is in FULL
Control of Beacon.
In a situation where a lending has a huge number credit applications to
review the cannot or may not want to process each one separately by hand.
So the using a scoring system such as Beacon to automate the process that
producing a number or "score" based on the criteria of that credit grantor
and the type of transaction requested. The Credit reporting agency only
REPORTS the credit and does not tell the lender how or whether they should
transact business. Some companies state they need X number of accounts or
they will not accept ANY late payment histories. This is what I was
explaining in my previous E-mail. We have no access to each companies
criteria therefore we cannot tell you how to increase you score.
Since the criteria is in fact decided and entered into beacon by the lender
or credit grantor they are the only ones who are going to know how many
accounts are needed or why THEY are making THEIR decisions.
You Wrote:
>You said you are unable to advise me on what to do to increase your
>Beacon score about my credit. If that is the case, then the reason
>codes are useless to the consumer or any advisor to the consumer.
Sir the reason codes are what are needed to increase your beacon score with
that company.
For example. I apply for a credit card and they state as on of the reasons
for denial that "Debt ratio to high" or "Current accounts at or above
credit limits". While applications for credit cards do show consumers a
"score" one is often generated. So if I still want to do business with
that company in order to increase my score I might pay down some accounts
or close some accounts, but to find out how much debt I would need to pay
off or how much I would need to decrease my debt to income ratio I would
need to contact the company I applied with and ask what the Debt to income
ratios are or should I be at most 90% of my credit limits, or How many
other accounts I would need to open to show I am skilled with my finances.
Each company has their own criteria.
So changes that increase you score with one company my lower your score
with another.
Review:
http://www.equifax.com/consumer/faqs/credit/faqtxt_k.html
You Wrote:
>I conclude not that you are unable to advise me, but that you are
>unwilling.
Well I'm sorry that you feel that way. Truly. You are simply asking
something of us that we cannot assist you with in the manner that you are
requesting. I will state that all of us are in customer care are more than
willing to assist and go above and beyond daily to assist in any way that
we can. Unfortunately in regards to Beacon the ONLY assistance we can
render, has been and you should contact you lender for specific ways to do
business with them, including their scoring criteria.
Thank you
gfishererinet.com on 12/04/97 11:37:36 AM
Please respond to gfishererinet.com
Subject: Re: Credit scoring
Date: Fri, 05 Dec 1997 07:41:24 -0500
From: Greg Fisher (gfishererinet.com)
To: customer.care@equifax.com
References: 1
Thomas F. Chapman
President and Chief Operating Officer
Equifax
1600 Peachtree Street, Northeast
Atlanta, Georgia 30309-2468
Dear Mr. Chapman:
Gee-willikers, mister, thanks for writing back so soon! I was just
about to give up after that experience with Mr. Gastel! Phew! Man!
I'm even going to send this to Mr. C.B. Rogers, the Chairman of the
Board (wrote to hime yesterday, too), then on to the board of directors,
to tell them what a great job you're doing! C.B., D.W., Lee, John, A.W.
(what's with these guys and the initials, anyway? Southerners?),
Robert, L. Phillip, Larry, D. Raymond, Betty, and Louis.
Lucky you put them on your web site and I saved the page on my hard
drive! You REALLY ARE concerned about the little guy, aren't you, Mr.
Chapman? I'll tell everybody I know!
I inserted my name in brackets like this: "You [Greg] Wrote:" so we
could keep track of things!
O.K., let's go!
customer.care@equifax.com wrote:
>
> You [Greg] Wrote:
> >You answered a question I didn't ask. I didn't ask you to interpret
> >lenders' decision criteria. I specifically asked about the "Beacon"
> >score. Further, my file is accurate. As you have said that accuracy is
> >more important, I can say scoring is more so. It is subjective.
customer.care@equifax.com wrote:
>
> You are correct scoring is in fact subjective. The same credit report
> shown to 3 separate companies all using Equifax can generate a different
> score based on each companies criteria. You may review our website at:
>
> http://www.equifax.com/consumer/faqs/credit/faqtxt_b.html
>
Greg's response:
Whoopsy-daisy! Here's a couple of words from Fair, Isaac's web site
(hooooooooo-boy! What a font of information!!!!! Those guys are smart!
They're statisticians, you know!):
"Scoring is completely objective."
"Scoring looks only at information that has a proven link to repayment.
It helps lenders avoid using information that is not predictive of
future credit performance."
http://www.fairisaac.com/html/fast_facts___scoring.html
Yikes! Subjective! Objective! I'll have to be introspective to figure
out those respective words! HEY! I'm a poet and don't kno...er, ah...
REALIZE it! Er,... whatever.
I wasn't referring to CREDIT SCORING being subjective. Where you or I
place more importance-- accuracy or credit scoring, is the subjectivity
to which I referred. You say tomato; I say tomahto.
Mortgage companies that want to sell their conventional loans in the
secondary market, through Freddie Mac, for instance, are recommended by
Freddie Mac to request only one type of score. I really don't think
they want the lender to tamper with it. Their using the same scoring
system for applicants across the country ensures the loans in their
portfolio are standardized so the investor is assured of the quality of
the instrument. KnowhutImean?
Someday, they might use a different set of criteria for each lender, but
we ain't there yet! No, sirree-Bob! I mean-- Tom! Not enough
computers or people who know how to run 'em! Butcha know something
else? Using the same scoring standard (I think you guys call them
"MODELS"-- cool!) for every loan ensures fairness and equal treatment.
Boy, I'm all for that. Aren't you?
Here's a quote from Freddie Mac (I think he's a Scot):
"Freddie Mac recommends requesting one type of credit score either
FICO bureau or MDS bankruptcy from all three repositories, Equifax,
Trans Union and Experian Information Solutions. Lenders should then
select the middle of the three scores they obtain. If only two credit
scores are available, the lender should use the one that indicates the
higher risk. Freddie Mac also suggests that the credit score used be
based on at least three tradelines."
There ya go! See it for yourself! Here's the page:... no wait a
minute, let me use your word--
Review! (reminds me of second-year foreign language class! Thanks for
the fond memories!):
http://www.freddiemac.com/function/fm-homby/creditsc.htm
Perhaps you are confused, confounded, dumfounded, nonplussed, baffled,
or ney, possibly perplexed by the term "conventional mortgage loan." It
is generally understood and reserved (BY PEOPLE IN CREDIT and lending)
to describe those loans that end up as part of mortgage backed
securities bought and sold through Fannie Mae and Freddie Mac,
congressionally chartered corporations formed by the government for that
purpose.
Now, speaking of the old U.S. of A., you know what else? Pretty soon, I
can see it now, lenders are going to use automated underwriting for
GOVERNMENT guaranteed mortgage loans (FHAs and VAs)! And you KNOW we
(The People) gotta be fair then! Thank you Uncle Sam! I'm sure it's
just around the corner...
Wait a minute... this just in.... can't... quite... make it out...
gotta... getta... new... box... of... ribbons... for... teletype...
ZIKES!
***FLASH*** HUD... HOME... LOANS... AUTOMATED... UNDERWRITING.
http://WWW.HUD.GOV/pr97-191.html
Saaaaaaaaaaaaay! I'll bet they're going to use the rock-solid
standardized Beacon score, too! You said, "The Beacon score is a
product provided by us for the credit grantor to enter THEIR criteria
for granting credit." HELLO! Let me know: you think lenders will be
"... in FULL Control of Beacon" for FHA loans?
Wwwwwwwwwwwwwhoah-Nellie! That would be a BIG old rhubarb!
Hey! Here's a birdseye view of your building!
http://maps.yahoo.com/yahoo/yt.hm?FAM=yahoo&CMD=GEO
&SEC=geo&AD2=1600+PEACHTREE+ST+NE&AD3=Atlanta%2C+GA
> You [Greg] Wrote:
> >One of your "reason codes" you state on your credit report about a
> >consumer, for conventional mortgage loan underwriting, that your Beacon
> >is not higher is that your report has too few, or too many bank
> >revolving accounts. The lender is not in control of your Beacon or your
> >criteria you use to calculate your Beacon. Please correct me if I am
> >wrong.
customer.care@equifax.com wrote:
>
> We are a credit reporting agency. We do not grant credit. Therefore we
> are not making decisions on whether a company grants or denies credit to
> you. The Beacon score is a product provided by us for the credit grantor
> to enter THEIR criteria for granting credit. With all due respect you are
> incorrect in saying "The lender is not in control of your Beacon or your
> criteria you use to calculate your Beacon." the lender in fact is in FULL
> Control of Beacon.
Greg's response:
Well, shut my mouth. FULL control? You mean all this time, I
thought... whoa. Now, I'm really lost.
With all due respect, AND I TRULY MEAN THAT, I could have sworn that
mortgage lenders originating and underwriting conventional mortgages
just used the Beacon score they got from you-- with no changes.
Here's where those guys, Fair Isaac, talk about the "broad based risk
scores" used for "mortgage credit access":
http://www.fairisaac.com/html/mortgage_lending.html
http://www.fairisaac.com/html/mortgage_loans.html
And here's Freddie Mac again:
http://www.freddiemac.com/function/fm-homby/creditsc.htm
Hokey smokes! I thought the national conventional loan lending system
treated everybody on the same scale when it came to credit--the FICO
score! The FICO would take away all that crazy, inconsistent human bias
found in those wacky, zany, madcap, full-of-shennanigans and Tom-foolery
(Tom! Get it?) underwriters, and unfair, unequal treatment.
Bye-gosharoonie, its back to the good old days! You're saying "the
lender in fact is in FULL
Control of Beacon." I DID NOT KNOW THAT! I DID NOT KNOW THAT!
Waaaaaaaaaa-HOOOOOOOOOO! Thanks!
customer.care@equifax.com wrote:
>
> In a situation where a lending has a huge number credit applications to
Greg's response:
Huh? ...where a LENDING...?
> review the cannot or may not want to process each one separately by hand.
> So the using a scoring system such as Beacon to automate the process that
> producing a number or "score" based on the criteria of that credit grantor
> and the type of transaction requested. The Credit reporting agency only
> REPORTS the credit and does not tell the lender how or whether they should
> transact business. Some companies state they need X number of accounts or
> they will not accept ANY late payment histories. This is what I was
> explaining in my previous E-mail. We have no access to each companies
Greg's response:
Ya, see. That's the problem with those spell-checkers: they don't do
too well on the fine points like "companies(')". Hey, wait a minute.
One of your customer service people didn't type this did they? I mean,
they don't do data entry on credit reports do they? You know 'puters:
one letter out of place and BAM! Your credit is somebody else's! Or
worse--SOMEBODY ELSE'S is YOURS!
Good thing we have that system (read: sweet deal for you) set up to
check our own credit reports for the creditors' errors (I'm sure YOU
guys never make a mistake).
http://www.equifax.com/consumer/faqs/credit/faqtxt_f.html
Yeah, buddy! Just 8 Mister Washingtons from every consumer in the
country to check for mistakes in the system you set up with the
lenders. 8 times a couple hundred million is, ah... ZOUNDS! Quality
control done by the consumer! By, gum, ingenious!
> criteria therefore we cannot tell you how to increase you score.
>
> Since the criteria is in fact decided and entered into beacon by the lender
> or credit grantor they are the only ones who are going to know how many
> accounts are needed or why THEY are making THEIR decisions.
Greg's response:
Doggonnit! It's those #$@%& lenders again! You stated, "Since the
criteria is in fact decided and entered into beacon by the lender or
credit grantor they are the only ones who are going to know how many
accounts are needed or why THEY are making THEIR decisions."
All this time, I thought... geez Louise! I gotta talk with the
lenders! Yeah! I'll ask them the criteria they enter into the Beacon!
Aw right! Now we're getting somewhere!
>
> You [Greg] Wrote:
> >You said you are unable to advise me on what to do to increase your
> >Beacon score about my credit. If that is the case, then the reason
> >codes are useless to the consumer or any advisor to the consumer.
customer.care@equifax.com wrote:
>
> Sir the reason codes are what are needed to increase your beacon score with
> that company.
>
> For example. I apply for a credit card and they state as on of the reasons
> for denial that "Debt ratio to high" or "Current accounts at or above
> credit limits". While applications for credit cards do show consumers a
> "score" one is often generated. So if I still want to do business with
> that company in order to increase my score I might pay down some accounts
> or close some accounts, but to find out how much debt I would need to pay
> off or how much I would need to decrease my debt to income ratio I would
> need to contact the company I applied with and ask what the Debt to income
> ratios are or should I be at most 90% of my credit limits, or How many
> other accounts I would need to open to show I am skilled with my finances.
> Each company has their own criteria.
>
> So changes that increase you score with one company my lower your score
> with another.
Greg's response:
Uh-oh. Wait a minute. The Beacon knows debt ratios (debts divided by
income; you know income?)? GET OUT!
SIR, you're talking about credit cards and (by the way, call me Greg)
I'm just talking about conventional mortgage loans! See, I figured if I
narrowed down the scope of my question to the Nth degree, you'd be able
to answer it! At least give it the old try, old boy. OH, MAN.
SURPRISE! STILL DIDN'T WORK!
I could have sworn that a Beacon, was a Beacon, was a Beacon; that
Equifax and Fair, Isaac came up with that deal (***BREAK TIME***
Here's a public service announcement: the FED, of course has something
to do with this stuff--LOOK AT THIS>>>>: "2. This sentence in the second
bullet ("You can find out what is in your file") was based on a clause
specifically added to Section 609(a)(1). One comment from major
creditors stated that the reference should be expanded to refer to "any
information concerning" such scores "or other predictors." A more
frequent view, offered by a major CRA, a trade association, and a
federal regulatory agency stated that the section was unnecessary and
would confuse rather than educate consumers."
http://www.ftc.gov/os/statutes/2-fedreg.htm#N_2_
GREG SAYS: PLEASE DON'T CONFUSE ME OR THROW ME IN THAT BRIAR PATCH!
http://www.bos.frb.org/public/commbank.htm
***BREAK TIME OVER***),
and nobody outside those hallowed walls has
access to change it. Heck how could they? After all, it is
PROPRIETARY. PROPRIETARY. One more time: PROPRIETARY! I LOVE that
(25 cent) word. Zowie! What a regal legal zinger. Throw that baby
into a conversation and watch the flowers wilt.
Maybe the wallflowers.
customer.care@equifax.com wrote:
>
> Review:
> http://www.equifax.com/consumer/faqs/credit/faqtxt_k.html
>
> You [Greg] Wrote:
> >I conclude not that you are unable to advise me, but that you are
> >unwilling.
customer.care@equifax.com wrote:
>
> Well I'm sorry that you feel that way. Truly. You are simply asking
> something of us that we cannot assist you with in the manner that you are
> requesting. I will state that all of us are in customer care are more than
> willing to assist and go above and beyond daily to assist in any way that
> we can. Unfortunately in regards to Beacon the ONLY assistance we can
> render, has been and you should contact you lender for specific ways to do
> business with them, including their scoring criteria.
>
> Thank you
>
Greg's response:
No, no, no! Thank YOU! I'll get in touch with a bunch of lenders, give
them a copy of this, and ask them how they change the Beacon criteria!
Have a great Friday and a great weekend, Mr. Chapman! Happy Holidays!
I've attached a holiday MIDI file for your listening enjoyment!
--
Greg Fisher
Cadillac Owner (1978 Eldo)(Red)
Subject: Attachment
Date: Fri, 05 Dec 1997 07:53:02 -0500
From: Greg Fisher (gfishererinet.com)
To: customer.care@equifax.com
Here's your holiday music!
You know, we should get you your own e-mail address for Christmas!
--
Greg Fisher
Cadillac Owner (1978 Eldo)(Red)
Subject: Re: Credit scoring
Date: Fri, 5 Dec 1997 08:57:58 -0500
From: customer.care@equifax.com
To: gfishererinet.com
Greg,
Frankly I give up. I have been the one who has answered you questions.
At no point did I state I was Thomas F. Chapman. Your last E-mail was so
very full of frustration, cynicism and unproductive spite that I do
sympathise with you. Just like you sir if I new how to raise my own
Beacon score I would be more than happy to do it.
Simply there is no easy answer to the question. "How do I raise my beacon
score?" We don't have access to the criteria so no person at Equifax can
tell you how to raise your Beacon score. It is really that simple. When I
used to assist people on the phones I would get this question and then the
answer was the same.
You see all of the people here at Equifax are consumers just like you. To
go one step further, I am making plans to soon purchase a home much like
you are. And while I will have some knowledge of the process, I will not
know what my score is or how to improve it until I hear from my lender.
I apologise if my credit card example confused you or was seen as a red
herring. It is the easiest example used to explain Beacon score. Income
is not placed on a credit file but we will agree that it is asked for as
part of most credit applications. (Credit to me Credit and any types of
loans.)
We can also agree that any person can be turned down for credit for
information obtained outside of the credit report. And based on any one
lenders criteria, information not listed on the report, such as, employment
history, amount of overtime worked, base income, or clateral used in the
loan, may affect a "score" and is another reason we cannot tell you how to
raise your score.
I know that we may be seen as the "bad guys" in credit transactions and you
are not inclined to believe anything that I would say to you. I would like
to ask two questions though. Have you asked the company that accessed your
file how you can raise you score with them? And two, one person to
another. If I had the easy answer that you are asking for don't you think
I would give it to you and avoid this mutual frustration?
The answer to the second question is yes.
I would also like to thank you for the links you included in your e-mail.
I reviewed each one and found this one to be most helpful.
http://www.fairisaac.com/html/mortgage_lending.html
Fair, Isaac employs the industry?s most sophisticated
analytic techniques in building custom application
scoring models, giving lenders increased power to
distinguish between applicants and make informed and
fair decisions.
The above paragraph says exactly what I have been saying in my emails to
you. Does "custom application scoring model" seem like the lenders can
place thier own criteria?
It even goes as far to say "giving lenders increased power to distinguish
between applicants and make informed and fair decisions." This seems to
say that the Credit reporting Agencies do not make any credit dessions
about granting or dening credit and therefore have no power over the
scoring.
This whole situation could have been avoided by giving the form letter
asking you to just contact your lender.
But I wanted to also answer all of your questions. Give examples of how
scoring works. And ask you to contact you lender.
I would have been happy to answer any further questions that you returned
to me. But instead I received a very nice grammer check and insults.
If you would like to have me call you to discuss this further I would still
be happy to assist you. You can write back with a phone number where you
could be reached. I will return your phone call if I get your email be 4pm
EST today.
Thank you
Good Luck
Subject: Re: Attachment
Date: Fri, 5 Dec 1997 09:09:26 -0500
From: customer.care@equifax.com
To: gfishererinet.com
Perhaps this response from fairisaac is better.
Q:How can I raise my score?
A: While you can improve your future score, it is
unlikely that any single action you will take will have
a large impact on your score immediately. That?s
because your score reflects your credit patterns over
time. With this in mind, there are things you can do
now that will improve your score in the future. These
include:
Pay your bills on time. Delinquent payments
and collections can have a major negative
impact on your score. As they get older and
you pay all other obligations on time, the
delinquent information will have less impact.
Pay down your balances. High outstanding
debt can affect your score.
Apply for new credit sparingly. ?Shopping? for
credit can have an adverse affect on your
score.
But it?s important to remember that there is no single
action that will raise everyone?s score. Each time a
credit score is calculated, specific reasons are
delivered to the lender along with the score. If
you?ve been given your score, you can ask your
lender for these reasons (also known as ?score
factors?) that came back with your score. These
factors represent the four major reasons, in order of
importance, why your score was not higher.
Anything that you can do to address these reasons
(paying off outstanding accounts to address
?number of accounts with balances, for example)
will most likely result in an improvement to your
score.
Subject: Re: Credit scoring
Date: Fri, 05 Dec 1997 12:53:16 -0500
From: Greg Fisher (gfishererinet.com)
To: customer.care@equifax.com
CC: don.memberg@equifax.com
References: 1
Dear _________:
Aye, yi, yi, yi... you're not T.C.? Oh, man.
See, I've already been to your level. They didn't have the answer. I
e-mailed Dennis Bowman, then his boss Pete Thayer, then his boss, Robert
Cutrone, then his boss, that guy, William Gaster (Sr. V.P!), then his
boss, John Rougeou. J.R. never wrote back! Bill G. said John was way
up there on the chain of command, so I figured: Mr. Rougeou probably
only answers to the top man! So that's when I wrote to Mr. Chapman.
Thinking he didn't have the answer (when I got your response with no
name; I thought you were him!), I e-mailed Mr. Rogers!
Egg on my face! Because you didn't give me your name!
Ding, ding, ding.
Review: the lending system! Conventional loan lenders CANNOT change the
Beacon! You still don't get it? You asked above if I asked them how I
can "raise your score with them?" T-H-E-Y ---- D-O-N-'T ---- H-A-V-E ---- C-O-N-T-R-O-L ---- O-F ---- T-H-E ---- B-E-A-C-O-N! Holy, algorithms, Batman!
The Beacon is not a "custom application scoring model." It is a "Broad
Based Risk" model. Any schmoe lender can buy it. It's just one number
on a credit report. One you came up with. And, OF COURSE Equifax has
access to the criteria, don't be silly! If Equifax doesn't, who does?
Equifax SELLS the score! You're making dough on it and you don't know
how it works? You stated: "We don't have access to the criteria so no
person at Equifax can tell you how to raise your Beacon score." Good
gravy. This is out of hand.
>From Fair, Isaac: "Broad-based risk. Risk scores identify a consumer’s
risk of delinquency, write-off and personal bankruptcy based on an
analysis of his or her credit report. BEACON SM (Equifax), EMPIRICA®
(Trans Union), EMPIRICA™ (ITC*), Experian/Fair, Isaac Model (Experian)
*available in South Africa"
http://www.fairisaac.com/html/consumer__credit.html
See? The Beacon even has a trademark thingy next to it.
Equifax is responsible for the Beacon. But it is unwilling to release a
simple thing as: the right number of revolving accounts-- yet it can
say "too many" or "too few." Give it to your statisticians. They
should be able to come up with something. If a report says too many,
what would even be A RANGE of numbers representing the right number of
accounts to close to avoid that being a reason code that my score is not
higher? Like 1-5, 2-10, 7-12, 12-25, or 6-329.
> http://www.fairisaac.com/html/mortgage_lending.html
>
> Fair, Isaac employs the industry?s most sophisticated
> analytic techniques in building custom application
> scoring models, giving lenders increased power to
> distinguish between applicants and make informed and
> fair decisions.
Huzzah, huzzah. I'm genuflecting. Do you believe EVERYTHING you read?
Show me the research. Good night-- I'm just trying to get the highest
score; you'd think I was asking for military secrets!
Some lenders already use your Beacon score to decide even what rate of
interest to charge! NOW we're cookin' with Crisco! So, now, we're not
talking about whether a person is merely turned-down or not; it's
Moolah, Baby. Scratch. Coin. Wampum. Bucks. Cashola!
Sympathise? Apologise? Clateral?
Mutual frustration? C'mon. You're projecting.
Please forward this to Mssrs. Chapman and Rogers. Oh, hey, I will
return their e-mail if I get it before 4pm EST today. Or any time after
that. Guys on that level need time to respond (as we have seen). You
know, my first e-mail to you (Equifax) was in April?
And by all means, please DO send the form letter. Stick it in the
e-mail.
What IS your name, anyway?
Happy Holidaaaaayyyyys! Happy Holidaaaaayyyyys! (Just singing along.
Boy, that Perry Como!)
--
Greg Fisher
Cadillac Owner (1978 Eldo)(Red)
PS - "... frustration, cynicism and unproductive spite that I do
sympathise with you."
Harumph.
Can-it and lighten up. It's the season for goodwill toward men!
Consumers, too!
Subject: Re: Credit scoring
Date: Fri, 5 Dec 1997 15:17:41 -0500
From: customer.care@equifax.com
To: gfishererinet.com
I would have called you to discuss this but I did not see a phone number.
It's obvious that at this point you will not accept the answer from us.
Have you contacted the person/company who access your file about what needs
to be done about the score?
You stated that you contact a number of people here at Equifax about this
and did they tell you basically the same thing that I have told you?
This is step by step how scoring works.
A customer Credit grantor contacts a credit reporting agency about
obtaining credit files and becoming a member with Equifax. (This is
roughly the same steps for all reporting agents but I work for Equifax.)
Customer Care
They are reviewed and if they become members they can chose how they would
like to receive the credit reports from us.
If they chose a service such as Beacon they select their criteria for
scoring. They decide how much weight is placed on each item or lack of
items that are on each credit report. They may also wish to factor in
other concerns such as income employment or address history. (Information
that is not on the credit report but may factor into that companies
decision making process.)
With that setup they now have a rough blueprint they can use to grant or
deny credit.
Once you or any person applies for credit they request information from you
and/or co-borrowers about information needed to process your request. This
is how income and such factor in the scoring.
They then enter the information into their computers and request a copy of
the credit file. We then return the credit file and then their computers
and algorithms produce a score based on all of the information that has
been provided.
Each company also has a range of acceptable scores and yes some scores may
be "better" than others.
The credit grantor then decides two things.
Whether or not they wish to grant the credit and if yes
In what manner, maybe instead of a gold card they'll grant a classic,
perhaps they feel the risk is high so they decide to add an interest point.
(Second example in the case of most mortgages.)
The point is that each credit grantor decides the criteria that make the
score and once they receive a score they then decide in what manner to do
business.
In all cases Beacon generates 3-4 reasons in order of importance on why the
score was not higher. (3-4 reason are generated in EVERY case why the
score was not higher, in most cases of full acceptance the credit grantor
does not provide the reasons and the consumer does not ask for them.)
At this point the consumer can make a choice to find another company to do
business with or make an attempt to increase the chances of doing business
with the company that they applied with. You have chosen the latter so
that's where we'll focus.
If the reason was.
Not enough trade lines on file
Too many accounts over the credit limit
Time of employment to short
Income not sufficient for requested loan
These may not apply to you but for example.
The reason codes are the reasons that the score with this credit grantor,
for this type of transaction, based on the credit file, and the information
supplied was not higher.
If you want to raise your score with this credit grantor you would need to
rectify the reason codes given.
In the above case that could mean opening some accounts, or making sure
that all of the accounts you have open or have closed in the last seven
years are reporting on the credit file.
Make payments or the current accounts to lower the amounts owed.
Make clear to lender why or the circumstances of a job change. Was it a
move inside the company or outside the company within the same industry.
Add a co-borrower or ensure all of you outside income has been reported.
This is the area in which we disagree. But allow me a moment outside the
box.
The credit process is a three sided triangle, Consumer, Credit reporting
agency, Credit grantor.
The consumer has two "jobs" to apply for credit as s/he sees fit, and to
check periodically to see if information on the credit file is correct. It
sounds as if you have indeed done your share or even more than you share in
that regard.
The credit reporting agency, accepts information from credit grantors in
regards to credit, provides copies of the file to the consumer and if in
dispute with it's contents provides a vehicle to dispute with the credit
grantor, and provide copies to credit grantors when you apply for credit
with them.
Credit grantors, report accurate information to the credit reports and once
they receive the credit reports make decisions about whether or not they
want to do business and in what manner.
In regards to changing a score. Which of the above three entities has the
most information about how your score was generated?
You have the reasons or should have the reasons in plain text as to why
your score was not higher, and it seems you have a copy of your Equifax
credit report.
We have access (not in this office but in the above case) to the credit
report.
The Grantor has access to all of the information you provided, the credit
report, their ways and reasons for doing business and (yes they may not
disclose this to you) the criteria they set in place for Beacon when they
signed up with us and any changes they have made since.
But let's even ignore the criteria and Beacon for a moment. They have
access to the credit report and any documents you provided them, would you
agree?
You may also agree that in most cases if one can prove a high enough income
or access to enough funds they could make purchases on credit without
having a credit report accessed Would you agree?
In this case the company may still be using a scoring model to make
decisions but "Hey he's got a 30% down payment that's good enough for us."
In this case would you contact Equifax about why they charged 8% interest
instead of 7.5% of course not you would contact the company about why they
charged the higher rate and they would give you some reasons. Agreed?
So In every case once the credit has been accessed and the information is
provided to the grantor from you the credit grantor is the single most
information rich entity in the credit triangle and they of course decide
how much risk they are willing to take based on the policies they have
established
Now in your case, What if the answer is not enough income? We could not
give that answer because we do not know how much you make. In most cases
the credit grantor does. What if the answer is not enough accounts on
file? Well it is true we know how many accounts are on file but we do not
know how many constitute enough accounts to show "responsibility" to the
company you applied with. The credit grantor "should know" their policies
for granting credit, period. Equifax does not know each companies
policies.
Then take it one step further opening more 2 more accounts to raise your
score with a company that want 4-7 account when you have 3 would be good.
But the next company may only want 2-4. So you would raise your score with
one company and lower it with another. To explain think of this.
Under your current instance Beacon is the same for every company for every
transaction. And therefore we should be able to tell you how to increase
your score.
Which would mean the criteria for getting a $200,000 home is the same as
getting a secured $300 credit card.
Can we agree this is not true?
So you should agree that companies can make changes to the criteria of
beacon based on the type of transaction?
Within the realm of mortgage. Your instance is Beacon is the same for all
companies in the same industry. And therefore we should be able to tell
you how to raise your score.
Which would mean that if the same person went to a large company such as
CitiBank for that $200,000 and then went next door to Jay's Mortgage House,
(Jay is my name by the way) they would get the same deal from both
companies right? (We are under the assumption that Beacon is the same
across the board so two companies should get the same exact score and
provide the same financing, right?)
We both know that is not correct. The person may have a thirty day late,
or a charge off, items that may make Citibank so "no way" . It may have
been their experience that they do not wish to accept that type of risk.
Also when they entered the criteria for Beacon they might place a heavy
weight on current status and late payment, and place extra focus on these
type of items. Causing the score generated by Beacon for Citibank based on
their criteria to be lower or below what they say is acceptable to them.
But at Jay's Mortgage House we are more understanding and willing to take
more risk. We access the file but our criteria might say, well, 1 charge
off is OK and 3 thirty day lates are OK as long as they are 2 years old.
We are nice but we also want to make more money for accepting the "higher
risk". Our interest rates may be higher than the "primary lenders." So
the score number may be higher than that generated by Citibank and based on
the score generated by us based on our criteria we can provide X financing.
In the above situations I think you would agree that if you wanted to raise
your score with these credit grantors you would contact the credit
grantors. The reasons provided may be the same.
Accounts charged off as bad debt
Accounts paid 30 days or more late
Insufficient income
Employment history.
Each of the above companies are going to have their own requirement to feel
comfortable to do business with this person. Maybe for one paying off the
charged off accounts would be enough to raise the score, maybe more income
is the only way, perhaps a co-signer. Those companies should know the
process they use to do business would you agree?
So if the Scoring was the same for all companies all companies would
provide the same loans and the same rate. There would be no reasons for
people to go to higher interest rate loans would there?
Instead there are Primary lenders and lenders that accept persons in other
situations such as little credit or high debt or charge offs or whatever.
Do you think it is just as easy to get a loan from a large company charging
6.9% or a medium company charging 13% for a loan with the same terms same
property. Of course they 6.9% company is going to have a much tighter
criteria than the 13% company.
So can we agree that it stands to reason that each company sets their own
criteria for Beacon?
(The above is for example we don't know the criteria for Citibank and I
don't have a mortgage house.)
You seem like a business owner. If you where making a loan to a person you
knew really well would you access the report? And if you did and it can
back with a "low" score (based on criteria that you gave to Beacon when you
signed up for it) Would you deny your friend? Maybe. Would you charge him
a higher interest rate? Maybe. Would you ignore the report and the score
and accept the person's handshake as bond? Maybe. Would you be able to
explain to your friend why you could not grant his loan? I hope so because
that is a decision you are making.
You Greg, are giving us too much credit in regards to the power we have
over transactions. Once you dispute your report and agree it is correct,
apply for credit, we then do not tell the companies what to do with that
application. As a busines