Online Credit Scores Often Differ From FICO Scores
(May 22, 2006) — Credit scores found online are often generics, and significantly lower than the official Fair Isaac Corp. FICO score that mortgage lenders use to gauge how much of a risk a buyer will be.
The discrepancy sometimes angers both potential buyers and their real estate professional. “We’re getting a lot of angry conversations about `why is your score lower’ than what the consumer got somewhere else? Our members get blamed by their own customers, who are primarily brokers and lenders,” says Terry Clemans, executive director of the National Credit Reporting Association, a trade group that represents hundreds of credit agencies providing consumer reports and scores to mortgage lenders.
Fair Isaac itself has become concerned about marketplace confusion over its proprietary scores and a multitude of other scores. Tom Quinn, vice president of global scoring for Fair Isaac, says the company’s own research has documented disparities of anywhere from five points to more than 200 points between FICO scores and non-FICO scores on the same consumer.
The disparities exist because the statistical scoring models often assign different weights to the same information, and generate what may be strikingly different numerical conclusions.
Source: Washington Post Writers Group, Kenneth R. Harney (05/21/2006)
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