Consumer Law

Experian-Based FICO Scores to be Unavailable to Consumers

By Jeff Sovern

by Jeff Sovern

Fair Isaac has reported that Experian has terminated their agreement under which FICO credit scores based on Experian's credit data can be made available to consumers, though consumers can still obtain their FICO scores based on TransUnion and Equifax data.  Because Experian also has its own credit score system, VantageScore (a joint venture with Experian's other competitors, Equifax and TransUnion), it competes with Fair Issac, and that may have contributed to the decision; Fair Isaac has also sued Experian in connection with VantageScore.  Coverage in the Times is here.  The Times article states: "Experian itself will continue to sell FICO scores based on its data to lenders, so some banks may make credit decisions, at least in part, on a score that consumers can no longer see."  This may pose a problem for consumers contemplating borrowing who would like to know their credit score in advance.  Maybe it won't be a big deal because they will still be able to obtain the other credit scores, and the Experian credit report from which the Experian-based FICO score will be drawn is still available.  But to the extent that the Experian-based FICO score is based on factors in the Experian report that are not obvoius to consumers (which could happen; FICO scores are based on a proprietary algorithm which has not been publicly disclosed), consumers could be surprised by rejections from lenders using the Experian-based FICO score.  That seems inconsistent with the trend towards greater transparency of credit information reflected in the 2003 FACTA Act, which mandated that credit bureaus provide consumers with their credit reports without charge at least once a year upon request, though it did not require the credit bureaus to provide credit scores for free.  Congress has a lot on its agenda, but maybe it will turn its attention to this issue at some point. 

Full post as published by CL&P Blog on February 16, 2009 (boomark / email).