FICO and the Credit Bureaus

[christagious]

Does anybody else agree with me that FICO and the other Credit reporting Bureaus (Transunion, Equifax, Experian) are extremely intrusive?

Here we have some companies that basically control our lives because they control whether or not we can buy something. I absolutely hate this, with FICO credit score, here you have your life being controlled by a number, and God forbid you have an accidental delinquent or late payment on one of your reports.

I don't see how these can be legal considering the fact that these companies control our buying and selling. I think it takes away from the idea of a free market.

 

[angelatc]

NOt to mention that their accuracy rate is something like 60%...

 

[nate895]

My parents have someone who keeps putting on daycare charges from back when I was a toddler on their report. This has happened at least four times since I was six, and they have paid it off two of those.

 

[WarDog]

your right christagious when you really think about this, it truly is an invasion of life & Liberty. I know that these Neo Company's are all just another link of the "Neo Chain", The real ID the credit reporting, Crime reporting Driving record the tax records the fines fees and the penalty. Then you got to have there permission to have and do anything and everything. With tec going all out with radar and the like's of all it contains is going to be a nightmare. I can see it now when you wont have any privacy any where any place any time.

 

[cswake]

Have your parents lock their credit report at the three bureaus.

 

[amonasro]

These credit report agencies advertise aggressively too.

If I hear one more of the "Free Credit Report dot com" commercials I'm going to shoot myself. I actually have that stupid propaganda jingle memorized:

we monitor your credit
send you email alerts
so you don't end up sellin' chowder and t-shirts
gotta go to free credit report dot com
we coulda seen this coming at you like an atom bomb

 

[angelatc]

My parents have someone who keeps putting on daycare charges from back when I was a toddler on their report. This has happened at least four times since I was six, and they have paid it off two of those.

There are companies out there that make a living doing exactly this. If the debt is over 7 years old (as a general rule) your parents need only to write to the credit bureau and have it removed.

 

[CMoore]

The secret is to pay cash and don't buy anything on credit. If you get a mortgage to buy a house, find a mortgage company that will manually evaluate your credit. They do not all simply look at your FICO score. They will consider your income, your payment of utilities, etc. I have a friend who is a mortgage broker and she claims that even if you have up to $5000 in collections, she can still find you a mortgage.

 

[nate895]

There are companies out there that make a living doing exactly this. If the debt is over 7 years old (as a general rule) your parents need only to write to the credit bureau and have it removed.

They have written the other two times and it has gone off, and then some new company will randomly pop-up and report t again. I think the last time it only showed up on Experian, and the others were fine.

 

[bomybomy]

FICO scores are generally an accurate reflection of how a person has historically repaid their debts (promises to pay).

I pull 3-5 credit reports every day, and I wouldn't say 60% are inaccurate. Most of them are spot on.

I'm a mortgage broker as well.

 

[angelatc]

FICO scores are generally an accurate reflection of how a person has historically repaid their debts (promises to pay).

I pull 3-5 credit reports every day, and I wouldn't say 60% are inaccurate. Most of them are spot on.

I'm a mortgage broker as well.

Are you sure that the inaccuracies don't favor the borrower though?

I'm just quoting a number I heard some official person spout.

Based on mine, I'm inclined to believe they're off. But mine favors me, so I'm not going to point out their error.

I had a phone bill fiasco once, and my husband had a slew of medical bills, apparently for a broken arm that he never broke. (I like to think I would have noticed the cast...) That stuff was a bear to get removed.

FICO fought tooth and nail to keep their formula secret. Screw them.

 

[Zippyjuan]

The secret is to pay cash and don't buy anything on credit. If you get a mortgage to buy a house, find a mortgage company that will manually evaluate your credit. They do not all simply look at your FICO score. They will consider your income, your payment of utilities, etc. I have a friend who is a mortgage broker and she claims that even if you have up to $5000 in collections, she can still find you a mortgage.

It is considerable harder to do that now- that is in part what led to the current housing finance problems- they did not investigate potential borrowers well enough and lent them more than they could actually afford to pay.

 

[bomybomy]

Are you sure that the inaccuracies don't favor the borrower though?

I'm just quoting a number I heard some official person spout.

Based on mine, I'm inclined to believe they're off. But mine favors me, so I'm not going to point out their error.

I had a phone bill fiasco once, and my husband had a slew of medical bills, apparently for a broken arm that he never broke. (I like to think I would have noticed the cast...) That stuff was a bear to get removed.

FICO fought tooth and nail to keep their formula secret. Screw them.

Well, by law, a company is not allowed to file something against your credit unless they have a signed disclosure stating that you are aware if you do not pay them, it will negatively impact your credit. Most of your utilities, medical doctors, etc don't have that, so they don't report. So yes, you could have bad things out there, but those were not necessarily your "promises to pay", like signing up for a car loan, etc.

Some companies will still put those items on your credit, or sell the collection to another company who will. That is not legal, although I think it is appropriate and fair.

The point I was making is simply that a credit report is a very very good way for a lender to evaluate the character of a borrower. Usually those with a lot of derogatory items are very disorganized, inconsistent in work and/or paying their bills, they over-commit themselves and generally make poor financial decisions. That is the type of people lenders do not want.

On the other hand, a strong borrower has a credit report that is very strong, and you can tell instantly that every item has been paid on time, as agreed, their whole life. A lender feels much better about loaning that person the money.

The sub-prime mess was due to lenders ignoring incredibly bad credit reports (much like FHA does now). 1 day out of Bankruptcy, 1 day out of Foreclosure, etc....very, very bad decisions.