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Fair Isaac - credit scoring fraudware

Saturday, July 31, 2010

$84 NCO collection lowers FICO score by over 100 points

It’s incredible that someone with PERFECT credit and one utility collection has the same FICO scores as a person with collections and umpteen discharged accounts a year after filing for bankruptcy in June 09.  The bankruptcy court in California was so backed up, it didn’t order the discharge until late December 09.  The Trans Union and Equifax scores were above 660 in July 2010.

One $84 utility collection results in the SAME low score, whether paid or not:

NCO utility collection after move lowers FICO scores by over 100 points

Sunday, June 06, 2010

3 years later: myFICO STILL creates FICTITIOUS late payments

I recently posted about this KNOWN software bug in the FICO credit scoring software at CreditFactors:

FICO scores STILL create fictitious late payments on Equifax reports

It is astounding that NOBODY cares.

Over 3 years ago I documented the software bug and that it can DESTROY the Equifax FICO scores of people with OLD charge-offs.

Readers contact me about everything else, but not THIS devastating FICO bug. 

Nobody looks at their FICO score factors?

Nobody cares about their FICO scores?

That would be GOOD news and I hope that many (near) judgment-proof readers stop paying their credit cards and don’t care about their credit rating anymore.

HOWEVER, what about the people with little or no debt and OLD bad credit?

Why pay more for credit and insurance and maybe even get declined for jobs and loans due to these TOTALLY BOGUS FICO late payments?

Depending on how old your chargeoffs are, your scores can be lowered by 50 or even 100 FICO score points! 

If you have several 5-year old CORRECTLY reported chargeoffs, no new derogatory accounts or public records and re-established credit, your FICO scores SHOULD be well over 700.  However, your EQUIFAX FICO score could be 100 points lower if just one of the accounts is currently reported as charged off, resulting in the INCORRECT rating of the account as CURRENTLY late or RECENTLY late—depending on when the creditor last reported.

I see so many ads for Lexington and all sorts of credit repair frauds, there must be an interest in credit repair.  So why doesn’t anybody care about this FICO scoring fraud?

I was going to create a new blog with updated screenshots of the FICTITIOUS lates, but it seems like a giant waste of time.

Monday, November 23, 2009

Experian and Trans Union prevail in credit scoring suit by Fair Isaac

Fair Issac states that it will appeal the jury verdict.

TransUnion, Experian Defeat FICO Trademark Lawsuit (Update2)

By Andrew M. Harris

Nov. 20 (Bloomberg)—TransUnion LLC and Experian Plc defeated a lawsuit brought by Fair Isaac Corp. claiming that their credit-scoring system infringed FICO trademarks.

Fair Isaac will appeal the federal jury verdict, the Minneapolis-based company said today in a statement. Fair Isaac sued the companies and Equifax Inc. in 2006, alleging they sought to monopolize the credit-scoring market and confused consumers with their VantageScore model.

“We remain confident in the validity of our claims,” FICO Chief Executive Officer Mark Greene said in the statement. Equifax settled the case last year on undisclosed terms.

U.S. District Judge Ann Montgomery in Minneapolis earlier this year dismissed Fair Isaac’s breach of contract and false advertising claims against Experian and TransUnion, while sending the trademark claims to trial. FICO is appealing that ruling, too, Greene said.

Chicago-based TransUnion said today the jury decision, which followed a three-week trial in Minneapolis, invalidated a FICO trademark.

“The court’s decision is a victory for the kind of choice, clarity and consistency that both consumers and lenders deserve when it comes to credit scoring,” Jeff Hellinga, president of TransUnion’s U.S. information-services division, said in a statement.

‘Industry Standard’

Developed by Experian, TransUnion and Atlanta-based Equifax—the three primary U.S. credit reporting companies—VantageScore was created to synthesize a single numeric credit score drawing on experience from each company’s data.

Fair Isaac, in its press statement, described its scoring method as “the industry standard” for lenders making credit decisions.

The defendants’ numeric scoring range overlapped with its 300 to 850 scale, FICO had said.

The jury’s verdict rejected that claim, according to a statement issued by Dublin-based Experian. VantageScore’s range of 501 to 990 “is used by four of the top five U.S. financial institutions and eight of the top 10 credit card issuers,” it said.

VantageScore Solutions LLC, which held the intellectual- property rights to the method used by the credit-scoring companies, also was named as a defendant in the suit.

“This decision is a victory for consumers who will continue to benefit from choice and competition in the credit scoring marketplace,” Barrett Burns, the Stamford, Connecticut- based company’s CEO, said in a statement.

The case is Fair Isaac Corp. v. Equifax, 06-CV-4112, U.S. District Court, District of Minnesota (Minneapolis).

To contact the reporter on this story: Andrew M. Harris in Chicago at .

The OUTRAGEOUS lie:

““This decision is a victory for consumers who will continue to benefit from choice and competition in the credit scoring marketplace,” Barrett Burns, the Stamford, Connecticut- based company’s CEO, said in a statement.”

The ONLY victory for consumer is the PROHIBITION of ALL credit scores.

We THE PEOPLE have to be treated at HUMAN BEINGS again.

I recently requested the address for disputes with Fair Isaac at its myFICO forum.  The posts to the PROOF of their “BUG” were promptly EDITED and DELETED again.  This is still about the FICTITIOUS late payments added by FICO scores.

Here is the censored thread:

What is the address for disputes regarding false data on myFICO reports?

The link they deleted is to my documentation of the “bug” adding late payments NOT reported by Equifax and seriously lowering the FICO scores:

5/4/07 - FICO scores add FICTITIOUS Equifax late payments long after charge-off

For 2.5 years this SERIOUS “bug” has been publicly exposed and documented.  Over 8,000 people read this thread.  Fair Isaac has been fully aware of this “bug” as I personally corresponded with its Barry Paperno.  Incredibly, Fair Isaac did NOT fix this “bug.”

The reason I’m putting “bug” in quotes is because Fair Isaac DELIBERATELY lowers the FICO scores of people with charge-offs.

Fair Isaac also DELIBERATELY rated the Capital One and Target revolving accounts reported without the credit limits.  The lower the scores, the higher the profits for the creditors.  And I suspect that people like Barry Paperno and the thugs in charge of FICO scores are the kind of perverts who get off on causing misery and driving people to kill themselves.

The perverts in charge of America enjoy the destruction of freedom and prosperity.

As FICO scores are required for just about all mortgages, they contributed greatly to the credit crisis.  And NOBODY is doing anything to stop them.  I’m STILL the only person on the planet who gives a damn?

It’s truly incredible that tax payers funded this bizarre litigation over credit scores while NOTHING is done to prohibit all scoring.

We are HUMAN BEINGS and deserve to be treated as such.

Sunday, April 19, 2009

FNMA nad FHLMC tightening underwriting guidelines, making it more expensive to get a mortgage

Mortgage industry changes throw new hurdles in borrowers’ way

Fannie Mae and Freddie Mac are tacking on extra fees for many loan applicants, while some lenders are going even further in tightening underwriting rules.

By Kenneth R. Harney
8:59 PM PDT, April 18, 2009

Reporting from Washington—Mortgage rates and house prices are down—which sounds great for buyers and refinancers. But mortgage industry underwriting and appraisal changes taking effect this month are putting new hurdles in the way of borrowers and loan officers.

Take Fannie Mae’s and Freddie Mac’s add-on fees for loans purchased after April 1. In some cases, applicants are being hit with extra fees of 3% to 5% because of the type of property they want to buy or refinance, their credit scores or the size of their down payment.

Some major lenders who sell loans to Fannie and Freddie are going further—tightening underwriting rules beyond what either corporation requires. For example, as of April 6, Wells Fargo, one of the country’s largest mortgage originators, imposed a new minimum FICO credit score of 720—up from the previous 620—on all conventional loans purchased through its wholesale system that have less than a 20% down payment. It also began requiring a total debt-to-income ratio maximum of 41%—down from the previous 45%.

Fannie Mae now has a mandatory fee of three-quarters of a percentage point on all condominium loans, no matter how high the applicant’s credit score. For a once-popular interest-only condo loan with a 20% down payment and a borrower credit score of 690, Fannie imposes the following ratcheted sequence of add-ons: one-quarter of a percentage point as an “adverse market” fee; 1.5% for the below-optimal credit score; three-quarters of a percentage point for the interest-only payment feature; and the same because the property is a condo. The total comes to 3.25% extra, which can be paid upfront or rolled into the loan.

...

They’re determined to destroy America.

If I hadn’t learned how to use common sense underwriting in the 80s and if I didn’t KNOW how well it works, it wouldn’t be so upsetting.  EVERY underwriter knew how to make sure that good people got good loans—until FICO scores came along in the mid 90s. 

The criminals at Fair Isaac can be proud to have paved the way for the destruction of America.  They’re not the only ones at fault, need to credit the author of this article too.  Kenneth Harney has known for many years that FICO scores don’t predict defaults and he did NOTHING to stop them.  Note that any criticism of FICO scores is conspicuously ABSENT from the article.

A notable exception is the 2/08 Business Week article linked at:

Lenders agree: FICO scores do NOT predict defaults

I truly appreciate Dean Foust’s and Aaron Pressman’s work. 

The million dollar question:  WHAT HAPPENED?

Why are lenders STILL using FICO scores?

Aren’t things bad enough yet?

Are we all supposed live like the poor in Mumbai?

THE poverty-stricken father of Slumdog Millionaire child star Rubina Ali plans to become a millionaire himself-by SELLING his nine-year-old daughter.

Instead of FINALLY taking action to get back to COMMON SENSE underwriting and to reverse the American course to HELL, the banks, Fannie and Freddie do everything they can to destroy what’s left of America.

Earlier today I posted at Trado:

Are houses at priced 50% of the market high bargains? Adrian Salbuchi’s take on the dollar

All bets are off. NOBODY knows what will happen.  We are in uncharted waters.

I DO know that FICO scores don’t predict but CAUSE defaults and everybody with half a brain and willing to spend a few hours to learn about FICO scores will come to the same conclusion.

Tens of thousands have read my submissions to the FTC and FRB.

And not a single person with just a little bit of power or influence gives a damn.

I don’t get it.  You don’t have to be a patriot or in any way care about others to want to DO something.  Do they all think they’re the “elite” and so wealthy that they won’t suffer? 

How could anyone NOT care about America turning into a slum?

Friday, March 20, 2009

Fair Isaac is struggling:  new Beacon mortgage score

It’s obvious that Fair Isaac is desperate.  Experian terminated the resale agreement and lenders agree that FICO scores FAILED:

Lenders agree: FICO scores do NOT predict defaults

As I have documented YEARS ago, Fair Isaac is so utterly and totally incompetent, its programmers can’t even correctly analyze the Equifax credit reports:

5/4/07 - FICO scores add FICTITOUS Equifax late payments long after charge-off

2/26/07: Open Letter to Fair Isaac Regarding its Addition of FICTITIOUS Derogatory Data to Credit Reports and Sale of Defective myFICO Reports

So here is their latest desperate effort to stay in business:

New FICO Credit Score for Mortgage Lenders Debuts

BEACON Mortgage Score from Equifax offers unprecedented predictive power to help mortgage lenders and loan servicers make smarter mortgage decisions

March 11, 2009 (Minneapolis, Minnesota and Atlanta, Georgia) — FICO (NYSE:FIC), the leading provider of analytics and decision management technology, and Equifax (NYSE: EFX), a global leader in information solutions, today introduced BEACON® Mortgage Score, a new FICO® industry score specifically designed to help mortgage lenders make the best possible risk decisions when addressing both current homeowners and those aspiring to own. Equifax plans to make the new score available in April to mortgage lenders and servicers for use in their loan servicing decisions including mortgage loan modifications. 

The new score builds upon the predictive power of today’s BEACON® credit risk score which is widely used in the mortgage industry. By focusing specifically on mortgage risk performance, FICO scientists have developed a version of the BEACON score with significantly greater power for assessing mortgage repayment risk.  In early validation testing, the performance of BEACON Mortgage Score was compared to that of the general risk BEACON score when predicting mortgage repayment risk specifically. The new score identified up to 25 percent more of the high-risk mortgages and home equity lines-of-credit that later became seriously delinquent. In light of today’s housing crisis, this new score can aid servicers in earlier identification of borrowers at risk, mitigating the high cost of consumers moving to foreclosure.

In business terms, these early results suggest that the use of BEACON Mortgage Score by the industry potentially can save it $1 billion in foreclosure costs and help keep an estimated 115,000 more struggling homeowners in their homes.

“One of the goals of our alliance with Equifax is to bring both companies’ assets and expertise to bear on the uncertainty facing lenders, borrowers and investors,” said Lisa Nelson, vice president of Global Scoring Solutions for FICO.  “This new score is one of the first fruits of that alliance, and it couldn’t be more timely or valuable for mortgage lenders, loan servicers and the securitization industry.”

“Everyone in the mortgage industry is working hard to manage risk more effectively, which will help address the rising foreclosure rate while allowing servicers to keep their doors open to qualified new borrowers,” said Dann Adams, president of US Consumer Information Solutions for Equifax. “The BEACON Mortgage Score is an innovative solution with unprecedented visibility that will provide greater predictive strength at a time when the industry needs it most.”

To assist clients, BEACON® Mortgage Score retains the same 300-850® scoring range, minimum scoring criteria, and inquiry treatment as previous versions of the BEACON® score.  However, to achieve its significant increase in predictive strength, FICO’s new scoring model assesses several additional data variables derived from Equifax consumer credit files, selected specifically to predict mortgage repayment risk.  As a result, the model includes 15 additional score reason codes that help lenders understand and explain the scores.  Businesses interested in more information about BEACON® Mortgage Score are welcome to contact FICO at .

...

Until we get some legislators and regulators with IQs above 60 and a conscience, I can only recommend that (near) judgment-proof readers STOP paying their unsecured debts and walk away from their over-mortgaged homes.

The economy is DOOMED as long as lenders continue to use Fair Isaac’s PROVEN TO FAIL scores.

Good people will continue to pay higher rates and become homeless just because they don’t have the MONEY or KNOWLEDGE to manipulate their artificially low FICO scores.

Vote with your money and STOP supporting the criminals.

Update:  I noticed the horrible Google ad for credit scores next to this post.  Obviously, those credit bureau “consumer” scores are even WORSE than FICO scores because no lender uses them. 

PURE fraud.

For MANY years I refused to put ads on my sites and I apologize to all who get screwed.  If you had donated, the ads wouldn’t be there.  I don’t get rich of the ads. But I got tired of begging for donations and the ads pay for about half the server cost.