Experian making credit scores harder to get
(Pittsburgh Post-Gazette Via Acquire Media NewsEdge) Feb. 12--Experian, one of the three major credit bureaus, has announced that as of Saturday it will no longer offer FICO credit scores directly to the public.
Credit scores compiled by Fair Issac & Co. based on data from the two other credit bureaus -- Equifax Inc. and Transunion LLC -- will still be available to the public through www.myfico.com.
Lenders will still have access to Experian credit data to formulate the FICO score, but consumers won't be able to know in advance what their scores are, leaving them with one less tool to monitor or improve their credit.
"FICO is the Cadillac of the industry. It's the score most consumers use, and is most widely used by lenders" said Curtis Arnold, president of Cardratings.com in Little Rock, Ark.
"If you wanted to cover your bases, you get all three FICO scores from all three bureaus. But now one-third of that equation, a big piece of that pie has been yanked out from under us. Lenders will see the three scores, but consumers won't, which puts us at a big disadvantage."
With the possible exception of your Social Security number, your credit score might be the most important number in your life.
It affects every area of personal finances as far as the interest rates paid on loans, premiums for insurance and in some cases whether or not someone qualifies to work in certain career fields.
"It doesn't seem fair that lenders have access to a score that will be unknown to consumers," said Bill Hardekopf, chief executive officer of LowCards.com, based in Birmingham, Ala. "Lenders are quick to use a change in credit score to increase rates and lower credit limits.
"Since this score is so important, lenders and credit bureaus should make the process a little more transparent to help consumers. In today's tight, sensitive lending environment, even people with good scores are being affected and don't understand why their scores may be changing."
Susan Henson, director of public relations for Experian, said although Experian has opted to discontinue its relationship with myfico.com, consumers have many other resources to help them manage their credit.
"There is no one credit score that all financial institutions use to make decisions and there is also no one credit score that consumers must use to help them manage their credit," she said.
Ken Lin, CEO of Creditkarma.com in San Francisco, said he believed that Experian's announcement was motivated by a desire to increase its share of the $1 billion spent each year to obtain consumer credit reports and scores.
Freecreditreport.com, an industry leader, is owned by Experian, and he believes that Experian is trying to differentiate its product. Now FICO can only promise access to two credit scores, whereas Freecreditreport.com has all three.
"From a consumer standpoint, you would prefer access to three rather than two," Mr. Lin said.
Contrary to what many consumers believe, FICO is not the only credit score available. It happens to be the most widely used, but there are dozens of credit scoring agencies, such as VantageScore, PLUS Score and others which are developed by the three national credit reporting companies or third parties.
They all, however, have a different scoring system, and not all creditors report to all three bureaus.
When using any credit score service, consumers should read the fine print to make sure they are not signing up for services they do not need or for something that includes unexpected fees.
"Consumers will still be able to get all three scores, but not through FICO," Mr. Lin said. "Experian will no longer provide their score to the public through FICO.
"There will be no change in access [for consumers]. This is a tactical maneuver between two leaders in the industry."
Mr. Hardekopf said that what consumers can do in light of the change is to ask creditors which report they pull to make their lending decisions.
"One way you can protect your credit score is by regularly getting copies of your credit report to make sure there are no errors," he said. "You can get a free report each year through AnnualCreditReport.com."
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