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Fair Isaac - credit scoring fraudware

Tuesday, April 15, 2008

Trans Union FICO 08—apparently not bad for people with unpaid collections and chargeoffs

I almost forgot to post this.  Last weekend I reviewed a client’s myFICO reports and his trimerged residential mortgage credit report (RMCR). The scores for TU were almost identical on the myFICO and the RMCR, 551 and 553. 

HOWEVER, the score FACTORS sure were different.  The RMCR:

The myFICO score factors:

Trans Union

What’s helping your FICO score

There are no positive reasons to show.

Top Negative Factors

You have a collection and a serious delinquency on your credit report.

Number of your accounts that were ever 60 days late or worse: 5
Number of collections on your credit report: 5 Collections

You recently missed a payment.

Your most recent late payment happened 1 Month ago

You have multiple accounts showing missed payments or derogatory descriptions.

Number of your accounts with a missed payment or a derogatory description: 7 accounts

You have a recent collection on your credit report.

Your most recent collection occured 1 Year, 1 Month ago.

-----------------------------------------------------------------------------------------------------------

This is the first opportunity I’ve had to compare the new FICO 08 scoring software with an older version.  As you can see, the RMCR utilized the Trans Union/FICO Classic (04). I’m ASSUMING that myFICO upgraded to the latest and highly touted FICO 08. 

FICO 08 received lots of publicity because Authorized User (AU) accounts are no longer rated.  Sellers of AU accounts have been claiming that Fair Isaac will be sued for ECOA violations and I have previously posted on that.  I also have had a draft for posting at the myFICO forum on the AU issue for months, but after Sunday’s deletion of my post by Fair Isaac, it’s probably a waste of time to post it there.

Clearly the myFICO score factors do NOT contain the B/L ratio factor as the RMCR.

My client has OLD collections and chargeoffs and the large unpaid balances are apparently IGNORED in the latest FICO scoring software.  Of course I’ll try to determine WHEN the scores start to ignore the balances.

Please note the Experian B/L factor is NOT for revolving loans as TU.

Experian references loan balances - without mentioning “revolving”.  Since this client has so many loans, I can’t draw conclusions.  However, it might have to do with the Sallie Mae student loans reported with a HIGHER current balance than the “Most Owed”.  Another client wrote to Sallie Mae and explained why it’s so important that they INCLUDE the deferred interest in their credit reporting of the Most Owed and/or Original Balance.

Sallie Mae advised that it will NOT report the Most Owed / Original Balance INCLUDING the deferred interest.  They deliberately damage the credit rating of many students by making it LOOK like they defaulted and didn’t make their payments, ending up with balances higher than the original loans.

Fair Isaac of course KNOWS that it is punishing students who took advantage of the deferment.

Any first year programmer could fix the FICO scoring software to EXCLUDE student loans from the B/L ratio.  However, Fair Isaac works for the CREDITORS who appreciate every opportunity to charge higher interest rates and fees and for the insurers who jump at the opportunity to charge higher premiums. 

It is of course empirically PROVEN that professionals with extensive education and student loans in deferment are horrible credit risks. [/sarcasm]

Get your RMCR when you apply for a mortgage

Some borrowers might be able to qualify for better rates by getting their scores from certain scoring software.  Ask the broker/lender which version of the software is used on their mortgage credit reports.  Software upgrades are NOT free and it may be years until all RMCRs utilize FICO 08. 

Many brokers have accounts with several resellers providing RMCRs and they can pick and choose.  Get one report with FICO 08 and the other with the old software.  If the inquiries are properly coded for mortgages, it won’t hurt the scores to run 2 or more reports on the same day.

Do NOT believe the vile LIES that it’s illegal to give credit reports to consumers.

The FCRA explicitly prohibits credit bureaus from putting such a clause in their contracts with creditors.  If your broker says it’s against the law or violates their contract, provide this posting—maybe s/he is just ignorant.

Monday, April 14, 2008

Reader mail:  This crap needs to stop (sue Fair Isaac?)

Hi Christine,

I came across your web-site when researching FICO. You have very good info and site I don’t want to reinvent the wheel, perhaps you can answer a couple of questions for me.

1. Can Fair (or as I call it UnFair) Isaac be sued? What are the odds of finding someone that will and prevailing?

Of course. EVERYBODY who purchases a myFICO credit report has legal claims for FCRA violations. 

But if you’re talking about suing over their credit scoring formula, that’s a different story.  A clear YES for their FICTITIOUS Equifax late payments and other documented software bugs.

However, credit scoring is always going to be UNFAIR and it’s unlikely anyone would prevail against Fair Isaac because the CREDITORS make the decisions to use their software.  And, while Fair Isaac’s scores are REQUIRED for mortgages (sue FNMA for requiring FICO scores?), the CRAs also sell scores to banks and collectors.

The issues are complex. 

2. I need to get involved in making the credit reporting agencies, credit card companies and companies like FI more accountable. How and where do I sign up? What can I do to make some SERIOUS WAVES to get these industries to do right by the people? Even Congress is lazy when it comes to getting things done.

Have you watched the FREE online movies Money as Debt and the Money Masters?

You can contact me and please feel free to pass my email around to anyone who wants wants to get involved in getting the above mentioned companies dealt with. We need a movement! This crap needs to stop.

I agree totally, BUT, it will take a huge effort.  You’re not just talking about Fair Isaac’s scores, which would immediately be replaced by another score, but about replacing the BANKING SYSTEM.

I have done a lot of research lately on banking, on American history, on what’s REALLY going on and how it works.  And there’s a lot I’m still looking for, such as detailed Federal Reserve income and expense reports.

Ellen Brown’s Web of Debt lists NUMEROUS possible solutions and based on my current knowledge, I’m for a 3-step program:

1) Have the government start creating the money (instead of the Federal Reserve) for NEW government debt.  As notes come due, create the money to pay them off.

2) Phase out fractional reserve lending.

3) Take over failing banks and OPERATE the banks to KEEP the profits instead of collecting taxes.

We already have the government GUARANTEE many loans.

Scummy outfits like Sallie Mae make the PROFITS on student loans while the government PAYS for the LOSSES.  We have the FHA and VA mortgage programs and the small business loan program.

It’s time that instead of the banks CREATING money from NOTHING and reaping the profits, the government creates the money and lends it to the banks for retail at INTEREST. 

No more free money for the banks!

Yes, the banks will have to charge a little more interest, BUT, it won’t hurt the economy because the interest the banks pay benefits the tax payers.  Instead of everybody struggling to get another loan, people will have more money to spend.

When I was a mortgage broker, I could never understand why an FHA loan came with a HIGHER interest rate than conventional loans.

I didn’t know that the government doesn’t create the money. 

The government COULD end the mortgage crisis by offering to REFINANCE all the mortgages at LOWER rates with money it CREATES.

The only problem is determining the rate to avoid price home price INCREASES.  And no, it wouldn’t cause inflation, because you would only pay off loans.  However, I really don’t like the idea of bailing out the bankers who are holding the bad loans.  It would have to be combined with taking over the major banks and/or negotiating with holders of notes for over-mortgaged homes.

Somebody ought to run the numbers to see what the PROFITS would be if the government refinanced a certain percentage of mortgages at 6%.  I’m NOT talking about giving free money to FNMA or any other PRIVATE corporation, but to have the INTEREST go to the government.  I used to be an accountant, I find this fascinating.

Dealing with credit scoring, reporting or banking issues is really a giant waste of time until the banks no longer run the world.  And if America took away the control over money creation from the bankers, it wouldn’t be long until the other countries followed.

NEXT: Income tax on WAGES is reduced or eliminated.

As the government debt decreases and government PROFITS from money creation increase, fewer taxes will be required.

Should the slaves have received the right to get 2 meals a day INSTEAD of being freed?

This is where we’re at.  We can demand this law and that law and keep busy.  Or we can FREE ourselves.

Reality check:

It is likely that the entire economic system will COLLAPSE and I’m looking at this mostly as creating a plan for AFTER the banking system imploded. 

I wanted to leave the US in 2002, but now I know that this is NOT an American issue, most countries are run by the bankers. 

I still write about credit and scoring to alert readers how horribly screwed up everything is and to motivate people to at least educate themselves.

I’m also hoping that eventually a few people will read Web of Debt and and discuss the issues.

There’s so much that COULD be done with a well designed and updated website that’s linked to by many other sites.  Maybe some people personally know elected officials and can educate them and convince them to support monetary reform.

But first I have to post a LOT more resources and counter points to common objections such as that inflation will increase when the government prints money.  That’s how the bankers brainwashed everybody.  The million dollar question:

Why doesn’t inflation increase when the BANKS create the money?

And the banks have created SO MUCH money, the Federal Reserve stopped releasing the M3 statistical data.

Why have the banks created so much money out of nothing that we actually are having inflation (much higher than reported)?

1) It’s very profitable to charge interest on money that you can create out of thin air!

2) Since money is created primarily by DEBT, there is no money for the INTEREST.  More and more DEBT has to be created so that the money to pay the INTEREST exists.

I hope I inspired a few more people to watch the free videos and to read Web of Debt.

Fair Isaac DELETED my posting about its incomplete credit reports at the myFICO forum

“The message you are trying to access has been deleted. Please update your bookmarks. ”

Let’s update our bookmark, here is the posting BEFORE it was deleted:

4-13-08_Palisades_collection_refused-incomplete-reports.pdf

The depressing part is that I don’t have the money to sue them into oblivion. 

Sunday, April 13, 2008

My posting at the Fair Isaac HORRIBLE credit advice forum

I was searching for Palisades and ran across this thread at the myFICO forum:

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&message.id=44831&jump=true#M44831

The myFICO Equifax excerpts in my posting are from a report dated 4/11/08.

Fair Isaac charges $16 for a credit report that FAILS to comply with the FCRA because it is so incomplete, it doesn’t even have the creditors’/collectors’ addresses.

“No contact information provided by Equifax”

That’s another Fair Isaac BLATANT LIE.

In fact, my clients often have to purchase a report from Equifax directly because Fair Isaac’s $16 reports don’t even contain the NAME of the collector.

“Collection on debt to: Not Reported
The collection agency "465yc00000" was hired to collect a debt of $67 originally owed to "Not Reported" on account number "XXX8731”

Isn’t it too cool how American corporations conspire to defraud consumers?

Equifax is by LAW required to furnish only COMPLETE reports.

Equifax KNOWS that Fair Isaac’s reports are incomplete, but it doesn’t care because it PROFITS from these illegal credit report sales when consumers have to buy a SECOND report from Equifax directly to find out which collector is reporting the collection.

What a great ploy to redistribute assets from the working people to the multi-national corporations.

The miracle of capitalism.

And of course it’s not just about consumers having to buy 2 reports, but chances of consumers NOT disputing improve as disputes become more difficult and expensive.  And THAT leads to higher interest rates, insurance premiums, etc.

The big corporations are the winners.

And the ADVICE given at the myFICO forum is so horrible.  The MORONIC letters, much like what Chase and Cap One included in their lawsuits against Hess Kennedy.  People who send these letters are bound to be pegged as frivolous disputers.

I have no idea why people are not smart enough to know that Fair Isaac does NOT have the best interest of the consumers in mind.  21st century people so dumb, it’s beyond belief. 

I can’t understand why so many people have such a low IQ.

Alex Jones keeps talking about how the average IQ has been systematically lowered.  I suppose it’s true.  I certainly have NO explanation for this bizarre behaviour, taking advice from the enemy.

UPDATE: The Fair Isaac moderator response:

This thread is locked and under mod review.

Thursday, November 29, 2007

I notified Fair Isaac of my intent to publish and requested notice of any inaccuracies

At first I couldn’t post and as I checked other threads, I realized how much misinformation there really is.  Fair Isaac is trying HARD to get their readers to pay collections.

Finally I was able to post, apparently somebody had been messing with the permissions:

It’s not a bad dream, FICO scoring is a nightmare and I’d LOVE to wake up!

However, not only am I awake, but I’ve been analyzing FICO scores since they became mandatory for mortgages in the mid 90s.

The documentation is posted at http://creditlegislation.org/activists/forum11/19.html

There’s the screenshot of the report and I even added the detailed explanation.  The DOCUMENTATION proves that there’s a serious PROBLEM with late payments MADE UP by Fair Isaac’s scoring software, late payments that are NOT reported by the CRA.

Apparently the posters here think it’s FUNNY that millions of people were forced into subprime mortgages and are now losing their homes, families and some even their lives—because of FICO scoring “bugs.”

Barry, if there’s ANYTHING at all that’s not accurate in my posting here or at my site, PLEASE let my know exactly what that is.

Since the fictitious late payment “bug” has NOT been fixed as I continue to see myFICO reports with those fictitious late payments, I can only assume that it is actually a bug by design, not just incompetence.

I’m going to send out a press release about the fictitious late payments and I’ll forward it to members of the House Financial Services Committee.  Also, I’m writing a book about credit, scoring, banking, the real reasons for the subprime crisis, etc.

So please advise if there are ANY inaccuracies whatsoever.

Thank you!

Christine

One of the posters in that thread wondered why my forums are closed and I’m the only person posting.  There’s no better explanation than the posts at the myFICO forum: the complete absence of intelligence.

Not one person at the myFICO forum can read a myFICO report and see that they made up the late payments.

Scary, very scary.  I think my clients all got it and they’re “average” people, not trained to look at credit reports.