Fri 11 Dec 2009
Congresswoman to Experian: Sell consumers their FICOs
Posted by lizweston under Liz's Blog
[3] Comments
Ten months after Experian stopped selling FICO scores to consumers, Congresswoman Niki Tsongas has proposed an amendment to the financial regulatory reform package that would force credit bureaus to sell the same scores to consumers that it sells to lenders. (UPDATE: Tsongas’ amendment was included in the package the House approved today.)
Experian is the only one of the three credit bureaus that no longer sells FICO scores to the public. TransUnion and Equifax continues to do so at MyFico.com, and Equifax also sells FICOs to consumers on its own site.
In her letter to her colleagues about the amendment, Tsongas wrote:
As of February 2009, consumers can no longer purchase their Experian FICO scores (that is the score generated using Experian’s data and the Fair Isaac FICO formula) but lenders still can. A number of news outlets and consumer advocacy groups have noted that this disparity puts consumers at a disadvantage in negotiations with creditors, since a consumer can only access two of his or her three FICO credit scores but a lender can access all three. At the same time, the three national credit bureaus (Experian, Equifax and TransUnion) may offer consumers their own proprietary scores or other kinds of credit scores and provide different information to lenders, leaving consumers confused as to how much credit and at what interest rate they are likely to qualify.
Congress has made clear, in the Fair and Accurate Credit Transaction Act of 2003 (P.L. 108-159) and other measures, that consumer access to credit scores is critical to fair lending. My amendments are straightforward, pro-consumer solutions.
Tsongas’ amendment to H.R. 4173 would require the bureaus to sell to consumers any credit score that is sold to creditors. The House is expected to vote on the legislation today.
All the bureaus should be required to give us at least one free score per year. They take my information without my permission, make money from selling it and on top of that they charge me to get my own information? They should be paying me.
Interestingly, the company that created the leading FICO score is in favor of consumers getting free FICOs once a year. It’s the credit bureaus that hate the idea.
Thank goodness. It’s about time. I was hoping this would make an appearance in the regulatory reform package. It’s like something out of Kafka to have a credit score floating around which you are never allowed to see, but which your lender can.
Most lenders take the middle score of the three, so when I bought a house a couple months ago, all I could deduce before approaching the lender was that the score they would use would be somewhere between my Transunion score and my Equifax score. That was a pretty big range.
Really, I’m not sure what Experian was thinking when they decided to do this. They knew full well that tighter regulation of the financial system was going to come before Congress this year, so a decision like that was almost like begging Congress to regulate their industry. Well, they got their wish!