Consumers Lose in This Love Triangle

Effective Valentine's Day -- Feb. 14 -- you will no longer be able to get your FICO credit score from Experian, one of the three major credit bureaus.

The company notified Fair Isaac Corp., the firm that created the credit-scoring model most used by lenders, that it is terminating its relationship with MyFICO.com, a Web site that sold FICO credit scores and other information directly to consumers. This means generally that Experian customers will not be able to see the FICO scores that lenders are using in determining their credit levels.

Although there are a number of credit-scoring models, it's the Fair Isaac technology that is most used by lenders to make millions of credit decisions each year. According to data from Fair Isaac, more than 90 of the 100 largest financial institutions use FICO scores. The 25 largest card issuers use it, as do the 25 largest auto lenders.

Credit-scoring models apply a mathematical formula to a consumer's credit history. For the most part they all use the same range of factors -- most importantly, late payments and the amount of debt owed -- to produce a three-digit score that is supposed to judge a person's likelihood of repaying debt.

This issue isn't which scoring model is better. It comes down to consumers having access to what most lenders are using to grade them -- and that is usually a FICO score.

"Experian's Valentine's Day present to 200 million American adults is to make sure they have no access at all to any Experian-based credit score that is widely used by lenders," said Craig Watts, public relations director for Fair Isaac. "Goodbye, transparency."

Consumers will still be able to obtain FICO scores based on data from their files at Equifax or TransUnion, the other legs of the Big Three credit bureaus.

The squabble between Experian and Fair Isaac follows a lawsuit Fair Isaac filed in 2006 against Experian, Equifax and TransUnion after the three developed a competing model called VantageScore, which uses a different scale than FICO.

VantageScore's scale ranges from a low of 501 to a high of 990. In the case of the FICO score, it runs from a low of 300 to a high of 850.

Since filing the lawsuit, Fair Isaac has dropped Equifax from the litigation. The suit is still ongoing, alleging that the VantageScore joint venture created unfair competition and violated antitrust laws.

"We were working hard to develop a positive business relationship with Fair Isaac and the litigation has not helped in that effort," said Experian spokesperson Susan Henson.

In defending Experian's decision, Henson said consumers will still be able to buy credit scores from Experian based on information in their Experian credit file. In addition to offering VantageScore, the agency sells its own proprietary PLUS score, which ranges from 330 (higher credit risk) to 830 (lower credit risk).