The FTC spots say, “No hidden fees. Absolutley free.”
The credit score sold at the spoofed Experian website FreeCreditReport.com is the PLUS Score. Experian states:
Your PLUS Score is formulated using the information in your credit file. It is modeled after the hundreds of commercial credit scores that help potential lenders, landlords, and employers quickly gauge your credit history and decide what kind of a risk they might be taking if they approve your application.
The Federal Reserve Bank of Atlanta periodical publication “Partners in Community and Economic Development” (Vol. 18, No. 2, 2008) contains an article titled “New FICO Model Changes Approaches to Consumer Credit.”
Here is the initial email to the U.S. central bank:
To: Partners in Economic and Community Dvelopment, Federal Reserve Bank of Atlanta; Sibyl Slade, regional community development manager, Federal Reserve Bank of Atlanta
I’m in the process of selling my home, and am likely going to sell it for less than I bought it for. Therefore, I will still owe the bank some money from my mortgage. They have offered to do a short sale of the home, in which they would absorb the difference. How will this affect my credit score?
Subject: Re: Short Sale, Fair Isaac statement, lending guidelines, points lost
See the Fair Isaac Q&A with the question, “Are the alternatives to foreclosure any better as far as my FICO score is concerned?”
For borrowing money for a house in the future, however, lending guidelines trump the credit score. For instance, Fannie Mae’s rule is outlined in its June 28 announcement: “Due to the increased incidence of preforeclosure sales, Fannie Mae is establishing a 2-year elapsed time period for reestablishing credit following completion of the action.” Fannie Mae is conducting pilot programs to test a potential new policy that quickens the preforeclosure sale (“short sale“) process.
Regarding the number of points lost, as with foreclosure (or any action), it depends on other factors. One columnist writes, “FICO spokesman Craig Watts said that the impact of a foreclosure on an individual’s score depends heavily on the payment history, length and number of credit trade lines in a consumer’s file, but ‘it is always significant.'” A big reason that there is little official information (although there are many opinions) on the true effect of a short sale is an old conundrum of credit scoring: The observer’s paradox. The consumer’s mere knowledge that he is scored changes his behavior.