Make way for new credit scoring system
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Make way for new credit scoring system
| Wed, 03-15-2006 - 6:09pm |
Ahhh....just when we get the concept of a FICO score down pat, the credit bureaus get together and try to outdo the FICO score by creating their own, new scoring methodology.
Here's an article that discusses it:

What utter silliness! Looks like the credit bureaus are looking for another way to squeeze out another revenue stream.
I could see having a new scoring system if it were to provide some new benefit, but the new system, despite what its developers are saying, squarely does not.
The article claims that the new system uses an "intuitive scoring system." I was thinking that instead of starting in the 500s and going to the 800s or 900s (as the FICO score does), it would start at 1 and go to 500, or 1 and go to 100 or 1000. But no--it starts equally arbitrarily (510, if I remember correctly--but who can remember so many arbitrary numbers??) and ends equally arbitrarily at 990. What are they thinking??
Then, the other benefit claimed is that it will produce more consistent scores across the bureaus. I don't see how that can possibly be true. Even the new system's developers admit that there will be some discrepancy based on the fact that each bureau has different information. But that's exactly why the old system is inconsistent! How is this an improvement?
You would think, if they wanted to make some extra money by selling their own system, they'd have invested a bit more time and money in developing a product that's actually an improvement in some way, and not just a new way to confuse the consumer.
Sheesh. What thoughtless product will they come up with next?
(hey, thanks for posting this, Danni. Good to have a heads-up!)
Hey Whiz - It will be rolled out to lenders shortly - and basically it's the credit bureaus' way of trying to squeeze out Fair Isaac Co - the company that developed the FICO score.
All my best,
Danni
That was interesting!
Becky
CL of 4th, 5th & 6th grade Scoliosis
"The credit reporting agencies -- Equifax, Experian and TransUnion -- announced Tuesday that they're introducing "VantageScore" to banks, mortgage lenders and credit card companies immediately. The new scores will be available to consumers after the lender rollout, probably later this year."
Source: http://www.businessweek.com/ap/financialnews/D8GBNAJ80.htm?campaign_id=apn_home_down&chan=db
Last night the NBC evening news quoted September at the month the scores will be available to consumers.
Hope that helps.
Carolyn