Credit bureaus are in the business of selling your information.  They don’t like people complaining about them or saying their information is wrong.

Did You Know We All Have a New Secret Credit Score?

By: John Dow

Just when you think that you’ve seen it all on the greed and deception in the financial sector, something new pops up. Back on February 14th Experian (one of the top three national credit bureaus), decided that they no longer were going to provide Fico credit scores to consumers.

There’s different speculations on why, but regardless of their reasons, this is not good for the consumers. Credit bureaus have always had secrets, they measure almost every activity that they receive reports on from lenders and credit card companies. They use sophisticated algorithms that are based on historical information to categorize every possible aspect of consumer credit worthiness.

Experian will still provide Fico credit scores to lenders, that’s one of their biggest profit generators. But they will no longer sell or provide the Fico credit score to individuals. The lax laws that govern credit in this country are weak at best. And there is nothing that stops the credit bureaus from doing anything other than they must respond in set amount of time.

In fact Experian has demonstrated the worst track record of any of the top three in every consumer credit area. As we reported two weeks ago, Experian makes it difficult to report and correct incorrect information unless you are a paying customer. You cannot talk to a human; just access a voice actuated phone response system that is difficult to navigate.

You can still buy a credit score from Experian but it will be one of their own internal products and may not compare to your Fico credit score. One of the given reasons for eliminating selling Fico credit scores to consumers is that Fair Issac (the company that invented the system used to create Fico credit scores) made unreasonable demands in compensation. Translation, it’s all about the money.

Experian has been trying to pitch their own scoring methods for years due to greater profits and now have finally dumped the Fico credit score access to consumers so they don’t have to pay Fair Issac any commissions. Considering Experian could have easily raised the fee to consumers to compensate for the Fair Issac cost, why would they just quit? Once again, it’s about the money.

So why is this such a big deal to consumers? Two reasons. One is that most mortgage lenders use an average of the three Fico credit scores they receive from the major credit bureaus. So if you have a missing score, how are you going to address the lowest score to bring up the average? You don’t know one of the three, and that’s not a very good thing.

Being denied access to something as important as your Fico credit score is a problem in other areas too. Prospective employers and insurance companies often use your Fico credit score to determine eligibility and rates. Leasing companies (both for real estate and cars) do too. So this can impact you in more ways than just mortgages.

As most are aware (you would have to be dead, living in a cave, or on a desert island not to know) a major part of the recent financial crisis is closely connected to the credit and lending area. If people can’t get credit, they can’t buy large purchase items like houses, cars, or even large appliances.

So why in the world would Experian choose now to pull this on consumers? One of the reasons is that their revenues are down and they are trying to cut costs. That’s reasonable on the surface, but not reasonable at the expense of consumers. Credit transactions are way down, so Experian is trying to make every dollar they can, no matter what impact it has on consumers.

So what can consumers do about this new secret Fico credit score? It’s not illegal; there are no laws that cover this type of scenario. Experian obviously doesn’t care, and neither do the lenders who choose to buy the Fico credit score. Which leaves you with only one choice.

Write to your congressman and senator. If enough people start to complain and bring this to the attention of our elected officials, they can amend the current laws. The laws were just amended in 2003 to require the lender who denied you credit to furnish the credit bureaus and reports that they based this decision on so that you could review and take some kind of corrective action.

But the problem with the law now is that they did not specify that the credit reports supplied to the lenders and the credit reports supplied to the consumer be the same. The intent was there, but as usual our friends at Experian have found a loophole and are taking advantage of it.

To get any action from your elected official, I would suggest you call and write. And if you get no response, don’t stop calling and writing until you do. This is important enough to continue until there is some type of solution. You can find your senator and representative contact information here: http://www.visi.com/juan/congress/.

About the Author

Need help with your Credit Score? New Clean Credit is a website that provides Credit Repair advice. Learn more about Experian and other credit bureaus. Learn how to repair your credit score. Go here to learn more: Free Credit Repair Help.

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Article Source: http://www.articlesbase.com/ – Did You Know We All Have a New Secret Credit Score?

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Understanding how credit scores are calculated can greatly help you protect your credit.  Here are a couple articles that review how the FICO score is determined.

How Credit Scores Work

We depend on credit for so many important things in life — whether it’s for buying a car, house or computer or getting a student loan. A three-digit number — your credit score — can determine whether you can do these things and even how much it will cost you.

How can a simple number determine whether you can buy a house or car? If you’ve read How Credit Reports Work, you know that your credit report contains a history of how you’ve paid your bills, how much open credit you have, and anything else that would affect your creditworthiness. Your credit score boils down all of that information to a three-digit number. Using the credit score, lenders can predict with some accuracy how likely the borrower is to repay a loan and make payments on time. It’s how electronics and department stores can offer instant credit.

This incredibly important number, which affects how much you pay for credit, insurance and other life necessities, used to be hidden from consumers. Until recently, only lenders and other businesses that used the score could access it. Fair Isaac and Company, which developed the score, felt that the score would only confuse consumers since there was nothing to tell them what it meant or what lenders were looking for.    –more

The New Math of FICO Credit Scores

Those with small blemishes on their record should benefit from the FICO 08 scoring change, while high-risk borrowers and those who “piggyback” are the likely losers.

Even the most responsible borrowers slip up sometimes.

Maybe a utility bill went unpaid after you moved and the missed payment went into collections. Or perhaps there are unpaid library fines or parking tickets in collections that are hanging onto your credit history and affecting your FICO credit score, which is widely used.

With the newest version of the FICO credit-scoring system, however, minor delinquencies are now overlooked in calculating creditworthiness.

Under the updated scoring model, called FICO 08, small missed payments lingering in collections with original amounts of $100 or less will no longer do damage to your credit score.    –more

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Here is another tip to help protect your credit.  Late payments can do some damage to your credit score.  You need to know what to do about it.

Credit Report – How Do Late Payments Affect My Credit Report And Score?

Of course you don’t want to make any late payments on your credit cards or loans and affect your credit report and score unless you absolutely have to, but what happens if you’re unable to avoid it? It all depends on whether you’re 30, 60 or 90 days past due. If it’s only one late payment you may be able to dispute it and get it removed from your credit report but if it’s more than one that may be difficult to do. And it depends on whether it’s currently past due or long term past due, and other factors.

Understanding how FICO credit scoring works for late payments will help you avoid late payments and understand which late payments will show up for the long term and which payments won’t.

Put simply, FICO credit scores are used by credit card companies, loan and mortgage companies, utility and insurance companies etc., to predict how reliable you’ll be as a customer and how much they can trust you make the payments.    –more