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Experian To Stop Selling Credit Scores To Consumers

Dispute with Fair Isaac leads to cutoff after February 15th

By Martin H. Bosworth
ConsumerAffairs.com

February 5, 2009

However, Experian still plans to sell data on consumer lending and borrowing to businesses, meaning that they may make decisions about loans based on data that consumers can no longer access.

Although the three major credit bureaus were forced by Federal law to offer free credit reports to consumers, the lending process has come to rely almost solely on the credit score — the three-digit number created from a "scoring" formula of the various data in a consumer's credit report — which consumers still have to pay to see.

The move comes at a time when good credit scores are more important than ever, as banks and lenders demand higher creditworthiness in order to make loans after the excessive lending of the previous decade led to the global financial meltdown.

"This is the second threatened termination and it comes at arguably the worst economic climate in the U.S. since the Great Depression; a time when consumers need more access to their personal credit information, not less," said Credit.com's John Ulzheimer.

Fair Isaac had previously negotiated deals with the three bureaus to distribute its FICO score to consumers and lenders using their data. Trans Union and Experian also market their own credit score models, but the scores can often vary wildly and are not considered as accurate as a FICO score.

The relationship between Fair Isaac and the credit bureaus became strained in 2006, when the bureaus introduced the "VantageScore," a new proprietary credit score model that was purported to be more accurate and fair to consumers. The new score was widely panned as unnecessary and confusing for borrowers, and few lenders have chosen to use the new system.

Fair Isaac sued the bureaus over the VantageScore, claiming it harmed the FICO brand and disrupted the ability of consumers to get accurate information about their credit. Although Fair Isaac later dropped Equifax from the suit, the charges against the other two bureaus are still pending.

Fair Isaac will still carry the FICO scores for Trans Union and Equifax after February 14th, and Experian will continue to provide free credit reports through the AnnualCreditReport.com Web site. But consumers are urged to buy their Experian score from FICO before February 14th, when it may go away permanently.

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