Now, should there be more government regulation enacted because lenders decide
to take advantage of the proven historical metrics used in scores, and therefore
charge a higher interest rate to people with less positives scores? I don't
think so. Borrowing money is a decision we individually make on our own and we
ought to expect those who lend will do so in the most advantageous way for them.
That's how they put food on their own table. If you can't make the
payment, don't borrow the money.
Article: "Lenders use FICO’s software to receive credit reports, but
the software has been updated a number of times and many agencies haven’t
updated. Over time, this has added to the total number of scores per
borrower." I do believe this is an innacurate statement. There
are multiple scores because there are multiple metrics used to produce scores.
The article referenced it, but didn't accurately portray it. There are
scores produced specifically for someone applying for a credit card, a different
one for an auto, another for a mortgage, another to determine the propensity of
the applicant to file bankruptcy, etc. The lender determines which score they
want to view andd use internally in their decision making. The actual score is
generated from the credit bureau, not from some lenders internal software. The
process of generating the socre involves very complicated formulas and
historical validations.There are also proprietary scores built by
the individual credit bureaus themselves. Not every score is a "FICO"
score. FICO just happens to be the nom du jour attached to credit scores. (Like
referring to tissues as a "kleenex")
Does this revelation qualify debt and credit as economic and consumer enemy
number one yet?Like I have always said, interest rate is the least
of the cost in debt/debit and credit cards. I have been struggling for 30 years
why people are giving up most of their take home pay to debt just in fees and
user charges? I mean they are taking a pay cut just to have debt and a credit
card with their employers.This revelation should also qualify some
financial legislation to protect consumers from the credit bureaus and card
companies manipulation consume debt and credit report to raise their fees and
charges by manipulating and falsifying their own reports to the credit
bureau.It's time to shut down the credit bureaus and disolve