I started my career in consumer finance in 1996 as a Credit Manager for Norwest Financial (now Wells Financial) and have since held various positions in consumer finance ranging from Senior Underwriter, Director of Customer Service and Collections and Operations Manager for several smaller finance companies and brokers primarily in unsecured lending. I have over 12 years of experience reading credit reports and have analyzed thousands of credit reports for underwriting, collections and skip tracing during my career.
Experian, Equifax and Trans Union, HEREINAFTER referred to as Credit Bureaus, sell consumers fake credit scores that are 50-100 points higher than any real score model used by any lender.
As most consumers may not be aware, each of the Credit Bureaus have several score models each (FICO, Fair Isaac, etc) that they sell to different types of lenders designed specifically for their industries (credit card, auto loan, mortgage, etc.) for underwriting purposes.
A few years ago I obtained my credit reports from the Credit Bureaus through AnnualCreditReport.com when I was shopping for a new car and competitive financing options. All three Credit Bureaus offered to sell me my credit score for nominal fees ranging from $7-$10 each. Although I could pull my credit reports through my former employer at their cost of just over $3.00 each and reimburse the company, the inquiries a work would be hard inquiries which could negatively affect my scores. For those reasons and for privacy and security reasons (my co-workers might be able to access my credit reports) I opted to pay more for the soft inquiries that would not count against my credit scores. All three credit score I purchased were in the mid 800's which I immediately knew to be impossible since I was not a homeowner and had less than 15 years of credit history. It is very rare for anyone without any past or present mortgages or with less than 15 years credit history and nearly flawless pay history to have a score over 800 and in a decade of experience evaluating thousands of credit reports the highest score I have ever seen was close to 850. My real credit scores at the time were in the mid 700 range (the finance manager at the car dealership let me see all three credit reports shortly thereafter)
I confronted our Trans Union account rep at my office and asked him which score model they are selling to consumers at first he tried to dodge the question before admitting that they are an arbitrary model not used by lenders that is 50-100 points higher that most score models purchased by lenders. I expressed concern that this was misleading and that there were no disclosures regarding this on the website and that in addition to my experience I have been getting numerous complaints from applicants that purchased their credit score online only to discover their real score used for underwriting are typically 50-100 points lower. I told I felt defrauded and that they along with the other two credit bureaus were taking advantage and defrauding consumers that have very little financial knowledge. He did not have any response to my concerns.
It is my opinion that the credit scores sold by the Credit Bureaus lacks warranty of merchantability because they are useless and have not economic or intrinsic value and are being fraudulently misrepresented as credit scores used by actual lenders for underwriting purposes.
I have report this to the Federal Trade Commission which has failed to respond or take any action whatsoever. This seems to be a pattern of the federal enforcement agencies (FTC, SEC, et al) that seem more concerned with protecting large corporations than vulnerable consumers and investors under the current administration.
I only hope that someday an aggressive consumer rights advocacy law firm files a class action suit against the Credit Bureaus for the likely millions of dollars they have bilked out of unknowing consumers for useless credit score that mean nothing on the real financial world.
Mike
Franklin, Ohio
U.S.A.
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