Consumer Reports says: Don’t buy useless credit scores

Real Estate Agent with Hillscape Properties, Inc. DRE#01452976

Useless credit scores?

This is news to me, especially after I just purchased the 3 report package to start on a re-finance of my own home; I feel duped.  But while discouraging, it is interesting to note that consumer reports says they believe many of the consumer paid scores are inferior to what lenders receive.  Complete disclosure and transparency would go such a long way in fairness to consumers. 

Original content by Thomas Halzack MLS#: 988459

In the recent July issue, they tell the consumer not to buy the FICO score or any other. Why? They say the Fair Isaac score, and most of the others, are not reliable.

“But the FICO scores that millions buy each year for $20 a pop are not the scores that car dealers, auto-finance companies, mortgage lenders, and others use. Moreover, after reviewing materials that Fair Isaac provides only to lenders, we think the scores are inferior.”

They go on to explain that legislation has been introduced in March that would require free annual disclosure of scores that lenders actually use, which are ‘now typically kept secret’.

For the record, I am 100% in favor of complete disclosure.

It goes on to state that the Consumer Financial Protection Bureau also believes consumers shouldn’t rely on them to consider how lenders view their creditworthiness. Strangely, but significantly, in 20 to 32% of cases studied, “the consumer and lender scores rated the same credit file differently enough that the scores were one or more credit-quality categories removed from each other.”

So, I guess, the question is….why?

And then the next question is….until they pass legislation requiring identical reporting or something close to it, what is a consumer to do?

Something that is accurate by 68-80% sounds like it needs a lot of work. But it is better than having no knowledge at all. They recommend just getting your free annual credit reports from, but stagger them, one every 4 months from each of the big 3 bureaus.

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Comments (5)

Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Great job by Tom pointing out the information. He will do well as a loan officers.

Jun 18, 2013 11:10 AM
Melanie Narducci
Hillscape Properties, Inc. - San Francisco, CA
Your San FranciscoBay Area Real Estate Expert
I'm a big consumer reports fan and I'm so glad Tom posted this, Joe.
Jun 18, 2013 11:16 AM
Keller Williams Select Realtors-Buy a home in Washington DC. Sell a home in Washington DC - Bowie, MD
I don't make promises.I deliver results.SOLD HOMES

Thank you very much Melanie for re-blogging this. I think I need to re-blog this one myself. Have a great Sunday. Take care.

Jul 21, 2013 05:30 AM
Melanie Narducci
Hillscape Properties, Inc. - San Francisco, CA
Your San FranciscoBay Area Real Estate Expert
Thanks for stopping by, Lanre. I was surprised at this take on these credit reports from such a credible source.
Nov 19, 2013 10:23 AM
Lisa Friedman
Great American Dream Realty - Essex, VT
30 Years of Real Estate Experience!

Melanie, this is such a scam that I am amazed they get away with it.  As an investor who watched my credit score like a hawk for years, I can tell you that these paid services never match up to the real credit score.

Jan 03, 2014 03:26 PM