Experian Stops Consumer FICO Scores

Date:February 11, 2009 | Author: | Category:Credit Scores/Bad Credit

The Experian News is right on the myFICO.com home page

This is  bad news for the consumer who for 5 years has been able to get access to all 3 FICO Credit Scores exclusively from one source, myFICO.com. It appears that Fair Isaac was served a termination notice, and that Fair Isaac must remove all products by February 14th unless a remedy occurs.

Meaning for Consumers?

  • Consumers will not be able to get FICO scores from all three bureaus directly. Consumers will only have access to their Equifax and Trans Union FICO Scores.  This Experian FICO Score will only be available via their lenders.
  • This will likely mean that more consumers will pull non-FICO scores and that these scores will often be quite different from the FICO Scores that lenders see. 30% of users could have a 50 point swing in their scores. Don’t believe me? Watch my TrueCredit review to see that, at the time I pulled both Trans Union scores, my Trans Union FICO was a 790 and my Trans Union non-FICO was a 739 — a 51 point swing. This can lead to a consumer getting a less competitive deal. For example, a consumer with a 680 non-FICO might have a 750 FICO score, but as they don’t know it, a lender may use this knowledge to offer less competitive rates. Sure, the lender will disclose the 750 score, but they may sense a lack of knowledge on the prospect and offer less competitive rates.

Why is this happening?

  • Experian owns FreeCreditReport.com and myFICO.com competes with that site, so they have an incentive to break off the contract. With myFICO only able to offer 2 FICO Scores, their product will face comparative challenges from products which offer 3 credit scores from all 3 credit bureaus.
  • myFICO has been experimenting with Free FICO Scores and that may be a threat to the folks at Experian
  • Experian is in a lawsuit with Fair Isaac over enterprise related scoring issues.

Steps you can take

  • Post a complaint to the FTC.
  • Write your congressman.
  • Get your Experian FICO Score in what little time is left.
  • Write about this on the blogosphere