A Fight Over Credit Scores Turns Into All-Out War (msn.com)
- Reference: 0179954520
- News link: https://news.slashdot.org/story/25/11/03/2018216/a-fight-over-credit-scores-turns-into-all-out-war
- Source link: https://www.msn.com/en-us/money/personalfinance/a-fight-over-credit-scores-turns-into-all-out-war/ar-AA1PB5zN
Equifax, Experian and TransUnion created VantageScore in 2006 as an alternative to FICO and collectively own the scoring system. The move came months after Bill Pulte, head of the Federal Housing Finance Agency, announced that Fannie Mae and Freddie Mac would allow lenders to use VantageScore for mortgage approvals. The three credit-reporting firms responded by offering VantageScore free for many loans. Fair Isaac had charged a few cents per score for decades before chief executive Will Lansing began raising prices several years ago. Revenue from selling credit scores reached $920 million in fiscal 2024, nearly five times what it was a decade earlier.
[1] https://www.msn.com/en-us/money/personalfinance/a-fight-over-credit-scores-turns-into-all-out-war/ar-AA1PB5zN
Hopefully this results in a smackdown (Score:2)
$10 for a hard pull seems crazy, hopefully the rest of the banking industry destroys these rent seeking assholes.
Re: (Score:2)
What kind of world are we living in when we're rooting for the banks to win in this fight?
Re: (Score:2)
Only in storybooks and fairytales do you find battles of the forces of good against the forces of evil. In the real world its battles between the morally gray (each convinced of their own goodness) at best and more often between two different evil armies. Sometimes you wind up rooting for assholes because they're fighting an even bigger group of assholes. Sometimes it works out that they manage to destroy each other in the process.
Re: (Score:2)
> $10 for a hard pull seems crazy, hopefully the rest of the banking industry destroys these rent seeking assholes.
$10 one-time cost vs. years of potential revenue from credit interest. Per person.
Banks didn't get rich worrying about penny costs.
Re: (Score:2)
Yeah, but just think about all the pre-approved credit offers you've received... multiply that by $10 each.
Re: (Score:2)
Pretty sure those mailings aren't hard-pulls; if they were then everyone would have a rock-bottom score from all of them.
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They are. That's what the article is about.
VantageScore came into being because the CEO steadily jacked up the price of a hard pull by thousands of percents.
The Big 3 came up with their own score, and FNMA+FHLMC will now use it.
What makes this news, is that the free market.... actually fucking worked.
Cause and Effect. (Score:2)
> Equifax, Experian and TransUnion created VantageScore in 2006 as an alternative to FICO and collectively own the scoring system. The move came months after Bill Pulte, head of the Federal Housing Finance Agency, announced that Fannie Mae and Freddie Mac would allow lenders to use VantageScore for mortgage approvals.
Uh, yeah. That "move" also started an avalanche of NINJA (No Income, No Job) Applications that ultimately created the largest housing crash in American history, triggering a larger global meltdown a mere two years later.
Let's ensure we wisen the fuck up as to what the Three Credit Hens try and shill for next time.
Re: (Score:2)
Well when you put it that way, I guess I better start cheer leading for the credit assholes. If what you say is true, that they caused the last housing collapse, then I need them to do it again, pronto!
I always thought the housing crisis was caused by the banks providing loans to losers and then bundling those loser loans into sell-able securities. When the loans started to get defaulted on, this cascaded and took out the folks holding these "junk" securities that they thought were better quality investment
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> Of course, the reason the banks decided to make so many bad loan offers to losers was direction from government and lawmakers.
You were doing quite well, but tripped just before the goal line. The government action you are talking about was "You need to stop redlining", which was a way to deny mortgages to minorities without saying you are denying mortgages to minorities. That was not a major cause of the crisis, though people who want to redirect blame have talked about it so much that gullible folk have started to believe it. The cause was the banks offering large mortgages to people who could not afford them (falsifying the do
\o/ (Score:1)
The whole premise of the credit scoring system is bullshit: people *pay* to gain access to someone else's flawed assessment (1) of their worthiness to get ass-fucked by greedy cocksuckers who are using the banking industry as a condom for protection from the side-effects of their actions.
(1) in a way which is unrelated to reality
The score is B.S. (Score:1)
The consumer thinks that having a great score means you're going to get any loan from any lender you want at a fabulous rate. That's totally false. Banks only care if they can make money off of you. A great score means you pay things off quickly. To a lender, that means they can't suck interest out of you.
Re: (Score:3)
As a person with an 800+ credit score, I can confirm that I can get credit anywhere I apply for it, at the best rates available, even though I pay off my credit card bills in full every month, and have no other debt. Last year I applied for a new credit card with a better cash back rate (2% on everything) and had zero issues getting it. I've also had no issues getting a Chase HELOC with zero closing costs (that account is now paid in full).
Lenders make money off of you even if you don't pay interest. Credit
Re: The score is B.S. (Score:2)
No, a great score means you take on various kinds of debt and pay it off reliably. The biggest risk with any loan is the lendee defaulting, as that means the loan value drops to pennies on the dollar (even if collections can recoup the money, that's expensive and long process). A high score means the risk of that is (nominally) fairly low Lenders don't care much if you prepay a mortgage or student loan, that's cash they can reloan out. In fact paying off loans off completely often lowers your score for a bi
Fair Isaac (Score:1)
How many people have been denied homes and food because of someone called Fair Isaac? Do these stories write themselves?
Re: (Score:2)
Before Fair Isaac, credit decisions were arbitrary and made based on an individual lender's discretion. Do you think that was more fair to people who wanted to buy homes or food?
Re: (Score:2)
Fair Issac was suppose to take out gender/racial and other biases from lending. It was supposed to be a way to subjectively evaluate applicants.
Trans Union in Canada had alternative in 1999 (Score:3)
The Fair Isaac score was anything but fair. It predicts whether or not you will default on a loan in a given amount of time. A few key points about it:
Your score is based more on who you are than what you do. It is highly correlated with ethnic back grounds, parents income and where you lived. Does your spouce have the same last name as you, is your name in the top 100 names of the year you were born.
Your score was heavily based on where you lived even though using address wasn't legally allowed using coordinate location was.
Trans Union Canada came up with two scores instead. The first score was how likely a credit file or applicant was fraudulent. The second score was the likelihood of defaulting. By removing the fraudulent files we could stop using location for the scores and significantly decreased the dependency of the score on things a person had no control over.
I was promised an earth-shattering KABOOM! (Score:3)
Headline promises open warfare. Summary says the price of a FICO score is going up $5. Weak sauce.
Re:I was promised an earth-shattering KABOOM! (Score:4, Insightful)
Yeah, but it was just a few pennies to have the *license* to do a little math a few years before that. Then someone decided they could screw over banks, and the banks realized, "Now wait just a darned minute. We know how to do math, too." and they created a new credit score, with blackjack, and hookers.