Borrowers Lose Access to Experian FICO^® Credit Scores

By Tom Fragala   

Did you know that, as of February 2009, you can no longer purchase your Experian-based FICO^® credit score? You can only buy your Equifax and TransUnion FICO scores.

How can this be? A little background first.

Fair Isaac is the company behind the FICO credit score, which is the most popular credit-scoring model. It's used by 90% of the 100 largest banks and all of the top 25 credit card issuers. These financial institutions use the FICO score to determine whether to offer you credit and, if so, at what interest rate. There are actually three FICO credit scores, each of which use your credit reports from Experian, Equifax and TransUnion, respectively.

However, Experian notified Fair Isaac that it was terminating its relationship with their consumer division, myFICO.com, which sells credit scores directly to consumers and resells them to some other consumer products. The bottom line is that there's no longer a way to buy your FICO Experian credit score, although your Equifax and TransUnion scores are still available.

The factors leading to this situation stem from a strained business relationship between the three credit reporting companies and Fair Isaac. A few years ago, the three bureaus announced a joint venture to launch their own credit-scoring model (VantageScore) that would compete with FICO. Fair Isaac viewed this as a substantial threat to their core business and filed a lawsuit claiming that the credit bureaus were engaging in unfair competition.

Unfortunately, consumers suffer because of these backroom squabbles. It's important for consumers to have continued access to all three FICO scores because lenders and creditors still have access to all three. So now, if you apply for a credit card, mortgage or loan, you won't see everything the financial institution sees. In many cases, lenders look at all three FICO scores, throw out the highest and lowest, and base their decision on the middle one. If you can't buy your Experian FICO score, you're not getting an accurate impression of where you stand.

The only other way to get your Experian FICO score is after you apply for credit or a loan. (Federal law allows consumers to see whatever scores the lender based their decision on, after the fact. And most lenders use FICO.) Still, applying for loans just to get your credit score isn't a prudent strategy, since the act of applying for a loan in and of itself can reduce your score a few points.

How will this all play out? No one knows, but Michelle Singletary of the Washington Post Writers Group wrote in the Atlanta Journal-Constitution, "Congress shouldn't allow business quarrels … to result in shutting down access to information that is essential to obtaining the best loan, insurance rate or even a job."

I'm not so sure it's Congress's job to get involved in this, and you can bet that Experian won't go down without a fight. For the moment, though, we're left to hope that Fair Isaac and Experian soon realize that consumers want and need access to their FICO credit scores and come to a mutually beneficial business arrangement as quickly as possible.