Credit Bureaus -- More than just a Credit Report and Credit Score

Credit Bureaus -- More than just a Credit Report and Credit Score

Now that lenders are taking a more consevative underwriting stance and desire more robust credit card marketing, the three major credit bureaus are offering more data about you.  Equifax, Experian and TransUnion, along with score provider Fair Isaac Corp., are creating services that provide lenders information about how much money a consumer makes and their net worth.

In 2009, Fair Isaac Corp. introduced its Credit Capacity Index, a proprietary model that uses data from Equifax to help lenders determine if an applicant can take on more credit and still pay their bills.  It is a model to help banks and lenders market credit card services to a targeted audience.

Over the last 3 years, Equifax has spent $1.6 billion in acquiring companies to augment its data.  These acquisitions include Talx Corp., for employment varification and payroll services, and IXI Corp. for consumer investment and asset information.

Experian launched Income Insight in November.  Income Insight provides lenders an estimate, rounded to the nearest thousand, of an individual's income based on his or her credit report.

Trans Union tried something several years ago that estimated an individual's income using their debt profile and credit usage.  The lastest version rolled out in 2008, but it is still being updated. 

With 78% of all credit reports containing errors, how are they going to accurately report income and asset qualification?  I spend a majority of my day cleaning up the mess they make on their main line of business.  How are they going to prevent that from happening in their secondary business?

Good News -- the mortage industry is not adapting to this information.  Since income and assets are moving targets, I don't see a change anytime soon.

Bad News -- This makes it easier for credit card companies to target individuals to solicit. 

What are your thoughts?