Don’t Waste Your Money Ordering A ‘FICO’ Score

Spokane Washington consumers are wasting their money ordering credit scores which don’t provide much, if any, value.

Credits monitoring services, credit score providers, and fraud alert systems have boomed in the last few years. While I think paying for a legitimate credit monitoring service has some merit, paying for your credit score is a waste of time and what you get won’t be what you think it is.

Part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires the newly created Consumer Financial Protection Bureau (CFPB) to study and report to Congress the differences between credit scores sold to creditors (lenders) and consumers (you), and whether these variances are detrimental to consumers. I’m sorely disappointed our taxpayer dollars were wasted on something like this when a Google search on the topic of “FICO scores,” or “credit scores” will tell you everything you need to know.

I’ll condense the whole report in one line for you – the credit score you purchase online is not the same score I will get when I order a score on your behalf (except by accident); therefore there is no reason for you to order one yourself.

Why are there so many different versions of your credit score?

• While FICO is a brand that has upwards of 90% of the scoring market either directly or by licensing its scoring model to other entities under their own brand, there are in fact other companies offering similar credit scoring engines.
• Just within the FICO company’s offerings there are different generations of models in use.
• The auto loan industry, credit card companies, and home loan lenders all use different scoring models.
• Data inconsistency. If one lender orders a credit report for you and omits your middle name and then I order a report using your middle name we may very well get different results. If your report is pulled on Monday, and then your Visa company reports an updated higher account balance to the bureaus on Tuesday, your score will be lower when I order your report on Wednesday.

The credit vendors are prolific with their spam emails and pop up online ads in an effort to sell you a credit score. If you do order one, just realize it is a meaningless number.

Don’t get me wrong, your credit history and the resulting score are critically important regardless the type of home loan you are applying for. Conventional Fannie and Freddie loans, FHA home loans, VA loan, and USDA Rural home loans all require you to have a particular score.

What’s more important is that you monitor your accounts frequently and take advantage of the free credit history you can get yearly from www.annualcreditreport.com. I monitor my own credit cards online on a weekly basis and just two weeks ago discovered my card information had been stolen somehow. Visa was very helpful in reversing the fraudulent charges but I had to cancel the card and order a new one. The Visa rep told me that most consumers don’t even notice fraudulent charges for almost 60 days in most cases, and it’s much harder to clean up the mess by that point.

If you’d like a copy of the full 22 page report the CFPB sent to Congress, just email your request to mmullin@theloanconsultant.com, and I’ll send you a copy.

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