- Part 7

Adams Media, F+W Media book

Last Christmas, a broadsheet named the New York Times published an item about people using credit scores in dating. In it was the claim, “The credit score, once a little-known metric derived from a complex formula that incorporates outstanding debt and payment histories, has become an increasingly important number used to bestow credit, determine housing and even distinguish between job candidates.”

The story quoted the book author (on something other than scores in employment) below. But, even though the scary baloney that employers use credit scores has been “increasingly” rebuffed, it is obvious that it has not been countered enough.

Employers do not use credit scores. Say that they do and you will end up here. If you’re already here, you are hardly alone.

So, get over it. Just make a correction, and move on.

From: Greg Fisher
Sent: Saturday, January 12, 2013 11:44 AM
To: Manisha Thakor
Subject: Adams Media, F+W Media

See this message and your response at https://blog.creditscoring.com/?p=4523.

In your book “On My Own Two Feet” (2007), you wrote, “Increasingly, prospective employers are also looking at this three-digit number, under the assumption that people who are financially responsible make better employees.”

What indicates that, increasingly, employers use credit scores?

—
Greg Fisher
The Credit Scoring Site
creditscoring.com
PO Box 342
Dayton, Ohio 45409-0342

[THE RESPONSE]

Aaron, are you up to the task?

This is a big mess.

In the ridiculous, ubiquitous, growing, and out-of-control worldwide discussion about credit scores, some know what they are talking about, and some don’t.

And some should. Employers are not permitted to check credit scores. At least that’s what it says (verbatim) on Credit.com.

Well, eventually that’s what it said.

However, recently, riffing on a silly (and inaccurate) story in a fabulously New Yorky newspaper, the actual chairman and co-founder of Credit.com appeared on something called the Daily Ticker. The Ticker is a video thing, and has a studio and everything (here’s your 15 minutes of fame, Yahoo!)! The rambling host said, “So we know it can affect whether or not you can get a loan–clearly, your credit score–or, even, to get a job–now, possibly, whether or not you can get a date or a second date maybe–more importantly–or a partner, for that matter.”

Phew.

That disjointed blather starts at 50 seconds into the video. In response, the interviewee was silent regarding the interviewer’s inaccurate setup. The guest didn’t bother to set the confused host straight.

Guilt by association? Abso-flippin-lutely. And lest you think that this is unfair to the guest–the guy from Credit.com–here are his words (verbatim) in a piece preceding the video screed on Yahoo!:

Apparently, the new normal involves both sides of the dating equation coughing up credit score information heretofore considered sacrosanct except in economic transactions. It’s no longer about getting a job, buying a house, car, cell phone or insurance, nor is it about renting an apartment, or anything else — and it’s not personal. Wait, I guess it is… According to several interviews conducted by the Times, if you don’t have the right score, you may well be shown the door.

Credit scores, relatively speaking, have not been around very long. The FICO score was first seen in 1989, but consumers were not given direct access until 2001. Bank accounts, however, have been around a few decades longer, but there doesn’t seem to be any trend for swapping bank statements on dates.

What’s more important: Your qualifications to take on more debt or how much money you have?

But, stop the virtual press! Not only is the interviewer the host of that little video show, he is the actual editor-in-chief of Yahoo! Finance! (!) Hokey smokes! Now we’re getting somewhere! (!) If he can’t make a correction, who can?

If only he–He, as He sits atop of the great Mount Yahoo!–gets the word, we can start to make some progress. The efficacy of a social media message is in question. But–hold on. Hold on a cotton-pickin’ New York Times minute. Maybe there is something better. Yahoo (!) is using (!) an ancient, long-forgotten medium of communication (!) called “email” (!). At the bottom of the story, it says: “We’d love to hear from you! Send us an email [!] at thedailyticker@yahoo.com.”

Yes, please send them email. They’d just love it. And social media messaging doesn’t work.

Terrible, terrible, terrible! What’s the world coming to? “Twitter.” “Yahoo!” “Times.” With names like that, how seriously can you take this grand discussion? But, hang on. Just. Another. Dad-blasted minute. Dude. This is different. Think about it in terms of top-level domains. Credit.com owns the word credit.

If, by the time you read this, the video disappears, don’t worry. That delicious piece of nonsense has earned a place in the next employers/credit score video coming to a screen near you.

Yahoo!

Powerful.

Blithering.

Non-responsive.

Inaccurate.

But, the myth is not their fault.

Not almost 30 percent

“Keeping revolving credit low can have a positive impact on an individual’s credit score, since this accounts for almost 30 percent of a typical score.” – A Fair Isaac press release, December, 2012

Let’s say we have 100 loaves of bread. There are two categories: Baked, and not yet baked (still dough).

There are 30 loaves in the baked category, and there are 6 types of loaves within that 30:

1   white
1   wheat
1   sourdough
1   French
25  rye
1   multigrain
------------
30  TOTAL

If we add the 70 loaves that are not yet baked, the total is 100.

1   white
1   wheat
1   sourdough
1   French
25  rye
1   multigrain
70  not yet baked
----------
100 TOTAL

Is it honest to say that almost 30 percent of the loaves are rye?

CFPB on checking your credit score at least once a year

From: Greg Fisher [mailto:greg@creditscoring.com]
Sent: Wednesday, December 12, 2012 11:03 AM
To: Michelle Person, spokesperson, U.S. Consumer Financial Protection Bureau
Cc: Richard Cordray, director, U.S. Consumer Financial Protection Bureau (via press office); Mallory McLean, press assistant, U.S. Consumer Financial Protection Bureau; Moira Vahey, spokesperson, U.S. Consumer Financial Protection Bureau
Subject: RE: Who changed the name of our Consumer Financial Protection Bureau?, checking your credit score

One of your “STEPS TO GET AND KEEP A GOOD CREDIT SCORE” is “GET YOUR FREE CREDIT REPORT EVERY YEAR.” In it, you state, “Tip: You don’t have to buy your credit score. The information you receive from the agencies is adequate.”

However, the document title of another of your public documents is,“Consumer Advisory: Check your credit score at least once a year.” You can find that title in the properties of the document by opening it and using Ctrl+D, by performing a right click and choosing Document Properties, or by using File then Properties in the menu of a PDF reader.

Even the internet address of the document (http://files.consumerfinance.gov/f/201207_cfpb_consumer-advisory_check-your-credit-score-every-year.pdf) contains the same message. But the word score does not even exist in the document content itself. Despite the file name, document title and internet web address, if you perform a word search for “scor” within the document that is displayed, there are no matches.

On July 16, somebody in your organization wrote, “Read our consumer advisory on checking your credit score at least once a year.” That message is signed “CFPB Web Team.” What is the name of the person who is the head of that team?

If your advice is to check our credit scores once a year, then which one should we check? And, how much does it cost citizens to do so?

And, answer last month’s questions today. You are falling behind.

—
Greg Fisher
The Credit Scoring Site
creditscoring.com
PO Box 342
Dayton, Ohio 45409-0342

FICO score Credit utilization, Wall Street Journal, 2012-12-01

From: Greg Fisher [mailto:greg@creditscoring.com]
Sent: Sunday, December 02, 2012 11:29 AM
To: Rupert Murdoch, chairman and CEO, News Corporation (via Julie Henderson)
Cc: Karen Blumenthal, columnist, Getting Going, Wall Street Journal, News Corporation; Karen Blumenthal (2)
Subject: credit score, Credit utilization, Wall Street Journal, 2012-12-01

You published:

Apart from what you actually owe, it especially helps to have unused credit available. “Credit utilization“—how much of your credit you actually use—accounts for 30% of the credit-score calculation. While the rule of thumb is to keep your credit use to no more than a third of your available credit, FICO high achievers use, on average, a skimpy 7% of the credit available to them.

However, according to Fair Isaac, 30% is a number referring to the importance of a category in calculating a FICO score called “Amounts Owed,” not “Credit utilization.” And, Amounts owed is driven by half a dozen factors, not just utilization. Fair Isaac explains that one of the items in the category is, indeed, “How much of the total credit line is being used and other ‘revolving’ credit accounts,” but it is only one of 6 items in that segment, and, in fact, is listed fifth.

One of the other items (one that you failed to mention) is “The amount owed on different types of accounts.” That introduces the idea of scoring based on specific types of loans—credit cards and installment accounts, for example. Another is, merely, “How many accounts have balances,” which has nothing to do with how much credit is actually used.

In 2009, a Fair Isaac spokesman told me: “When my company explains FICO scoring to a general audience, we apply general weights to major data categories such as, ‘Amounts Owed is 30 percent of a typical consumer’s score.’ We don’t break that weighting into finer parts for individual factors, both to avoid unintentionally misleading the public and to protect the model’s proprietary information. “

But if all of that is not overt enough for you, try this. Using the same words (apparently finally giving in, using the same, popular, over-simplifying street term) you use, Fair Isaac mentions this about the 30% category: “Credit utilization, one of the factors evaluated in this category, considers the amount you owe compared to how much credit you have available.”

So, now we finally know—in words straight from the horse’s mouth—that “Credit utilization” (despite wacky Wikipedia‘s inaccurate information) does not account for 30 percent of the score calculation; it is only one of the factors in the 30% category (and we have only a vague idea of its weight). What is not clear about that? You used quotation marks around the term credit utilization. Who are you quoting?

And, whose rule of thumb is it to use no more than a third of available credit? Is there some plateau at 33 percent? Are there only diminishing returns below that?

The state of the fourth estate is pathetic, so I created a website to deal with your industry’s poor attitude regarding accuracy. Corrections are published on Page A2.

Finally, what are you doing about my comments that you removed?

—
Greg Fisher
The Credit Scoring Site
creditscoring.com
Page A2
pagea2.com
PO Box 342
Dayton, Ohio 45409-0342

[UPDATE, 2012-12-03 5:30 PM EST: Continued on Page A2]

Who renamed the BCFP the CFPB? II

From: Greg Fisher [mailto:greg@creditscoring.com]
Sent: Wednesday, November 28, 2012 2:03 PM
To: Moira Vahey, spokesperson, U.S. Consumer Financial Protection Bureau
Cc: Richard Cordray, director, U.S. Consumer Financial Protection Bureau (via press office); Mallory McLean, press assistant, U.S. Consumer Financial Protection Bureau
Subject: RE: Who changed the name of our Consumer Financial Protection Bureau?, utilization ratio advice

Your website states, “Experts advise keeping your use of credit at no more than 30% or less of your total credit limit.”

You must be citing alleged-credit score experts from the credit card industry. What experts gave that advice to get and keep a good credit score? Name at least two.

Here is mine:

Fair Isaac, the FICO score company, states, “The more you owe compared to your credit limit, the lower your score will be.”
A person who pitches scores for Fair Isaac on its website stated, “The FICO brain trust says there is no specific number that qualifies as a ‘good’ ratio, just that lower is always better.”
In describing traits of those who Fair Isaac deems “High Achievers,” the company claims that those people use “an average of 7% of their available revolving credit.”

http://creditscoring.com/creditscore/fico/factors/creditutilizationratioadvice.html#zero

http://www.myfico.com/fico-score-high-achievers-infographic.aspx

And, please answer Monday’s question. I’m with the media, and I’m on deadline! The law says that you are to be known as the Bureau of Consumer Financial Protection, and you are doing everything you can to be known as something else.

—
Greg Fisher
The Credit Scoring Site
creditscoring.com
PO Box 342
Dayton, Ohio 45409-0342

Who renamed the BCFP the CFPB?

Hold up your mirror to the beam of light

www.bcfp.gov leads to the so-called Consumer Financial Protection Bureau. However, the agency’s name starts with C, not B.

Or does it?

A clue to this mystery could be this: A whois record indicates an IP location of Cambridge, Massachusetts even though the CFPB is a U.S. federal regulator located in Washington, D.C.

What in the world is going on here, citizen?

See “Who changed the name of our Consumer Financial Protection Bureau?” at creditscoring.com, The Credit Scoring Site.

From: Greg Fisher [mailto:greg@creditscoring.com]
Sent: Monday, November 26, 2012 3:01 PM
To: Mallory McLean, press assistant, U.S. Consumer Financial Protection Bureau
Cc: Richard Cordray, director, U.S. Consumer Financial Protection Bureau (via press office)
Subject: Who changed the name of our Consumer Financial Protection Bureau?

Who changed the name of our bureau and when did they change it?

http://www.creditscoring.com/influence/government/cfpb/name-changed.html

—
Greg Fisher
The Credit Scoring Site
creditscoring.com
PO Box 342
Dayton, Ohio 45409-0342

The President: Credit score can affect chances of getting job

In his weekly address, President Obama talked about submitting complaints to the Consumer Financial Protection Bureau. In that address, he said:

If you haven’t checked out your credit score recently, you should. It can have a major impact on your life. It can determine whether or not you qualify for a loan or what kind of interest you have to pay. It can even affect your chances at renting an apartment or getting a job.

However, the CFPB’s website states, “The nationwide credit reporting companies say they do not currently provide credit scores for employment purposes.”

Some have no credit score

In a commentary for UPI, Morgan Strong wrote

There is another thing far more certain than mere superstition that awaits the newborn. There is a Social Security number and a credit rating. Beginning with our squalling breech of the womb, we are marked by this obscenity. This marking, indelible yet unseen, our credit score, will continue throughout our lives and in effect compel us to make the choice of the path we are to follow.

That is inaccurate. Consumer reporting agency files are not recorded and retained on the newborn. If there is no information on a consumer, then there is no credit score. According to the state of New York Department of State, Division of Consumer Protection, “The credit agencies do not knowingly keep credit files on minors.”