Month: December 2010

Credit scores in old and new media

A CBS News correspondent said:

“(Your credit score) is what almost every company in your life uses to determine whether you are a credible, trustworthy borrowing candidate. From your prospective employers to your prospective landlords, most companies will check your credit score in order to gauge their risk. No one likes a deadbeat!”

An anonymous writer for Investopedia had the (exact) same thought: 

“Well, it’s what almost every company in your life uses to determine whether you are a credible, trustworthy borrowing candidate. From your prospective employers to your prospective landlords, most companies will check your credit score in order to gauge their risk. No one likes a deadbeat!”  [update, 4/24/2011]

But, even funnier, is that the chain goes one more step:  The anonymous writer thinks a lot like another writer.

The Counter-Plagiarism Handbook : CJR
Copy, Shake, and Paste
University of Chicago Plagiarism Guidelines

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Update 12/23/2010:  Part Two

Canada – Pointage de crédit junk journalism from ValueClick

In an item on the Globe and Mail website, an Investopedia article contends, “Credit scores range from 300 to 850.”  However, in Canada the “pointages FICO vont de 300 à 900.”

In the U.S., the FICO credit score scale is 300 to 850.

Investopedia (who is actually based in Canada), a division of ValueClick, provides junk journalism articles to Hearst and Forbes, too.  Martin T. Hart is the chairman of ValueClick according to Forbes.  Whether you choose to believe Forbes about that is entirely up to you.

FHA average FICO score surpasses 700

FHA (the Federal Housing Administration) reports, “For the first time the average FICO score for insured cases reached the 700 level — actually 702.”

But, somebody thinks that’s not necessarily such a great thing.  The U.S. Department of Housing and Urban Development (HUD (FHA is part of HUD)) has just opened investigations resulting from complaints filed by the National Community Reinvestment Coalition (NCRC).  NCRC states that its investigation “reveals that too many of the country’s largest financial institutions are refusing to lend under the FHA loan program to consumers with credit scores between 580 and 640, despite the fact that FHA policy establishes a 100% guarantee for refinance.”

However, lenders are judged by their default and claim rates, and their underwriting authority can be termintated if those rates are too high.

Also, see:  Average credit score chart, FHA loans.

Zillow and SF Chronicle believe Fed credit score info

Consumer reporting agencies TransUnion, Equifax and Experian all emphatically state that they do not provide credit scores for employment purposes.

Despite that, again, the Federal Reserve claims that credit scores are, indeed, used in employment.  Zillow and the San Francisco Chronicle believe it.

The first sentence of a Federal Reserve Bank of Cleveland commentary states, “Credit scores are used in nearly every part of our lives, from applications for car loans, mortgages, credit cards, and car insurance to even some hiring decisions.”


FICO score service on TransUnion website to end

The availability of FICO scores on TransUnion’s website TransUnionCS.com will end by March 31, 2011, according to TransUnion’s Steve Katz.

Consumers will still have access to FICO scores based on TransUnion files at myFICO.com after the end of the TransUnion Consumer Solutions service.

Equifax FICOs are available from myFICO or Equifax.com.  Consumers’ access to Experian FICO scores ended in 2009.

UK ICO – Credit

In the United Kingdom, the Information Commissioner’s Office (ICO) refers to credit bureaus as “credit reference agencies.”

The ICO is the UK’s independent authority “set up to uphold information rights in the public interest, promoting openness by public bodies and data privacy for individuals.”  The Information Commissioner enforces the UK’s Data Protection Act 1998 and Freedom of Information Act 2000.

The office provides a document for consumers titled “Credit explained.”

Canada – Understanding Your Credit Report and Credit Score

“Understanding Your Credit Report and Credit Score,” is a publication of the Agence de la consommation en matière financière du Canada–also known as the Financial Consumer Agency of Canada. 

You can even take a quiz.

Transunion and Equifax are mentioned; Experian is not.  Canada is not even on the Experian press page drop-down list of countries.  The company ceased consumer credit bureau operations in Canada in 2009 (but paid $207 million cash for creditscore.com and creditreport.com in 2010).

The FCAC, established in 2001 by the Canadian federal government, is an independent body “working to protect and inform consumers of financial services.”

National Association of Realtors – NAR credit policy

The NATIONAL ASSOCIATION OF REALTORS actually has a written credit policy; it is named “NAR Credit Policy.”

The sub-title is, “LENDERS, FHA, THE GSEs, AND FEDERAL REGULATORS SHOULD REASSESS AND AMEND THEIR CREDIT POLICIES SO MORE QUALIFIED BORROWERS ARE APPROVED FOR MORTGAGES”

The policy states:  “NAR questions the assumption that borrowers who agree to a loan modification or a payment plan for credit obligations they can no longer afford but who then demonstrate their ability to handle the modified payments are higher credit risks. NAR urges FICO to study the credit risk performance of these consumers and modify the FICO formula accordingly.”