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Credit Repair News

4/11/2011
The Credit Score Experian Is Selling You Isn't The One Lenders Consider

If you've ever turned on a TV, you've seen those dudes singing about getting your credit score and making it seem like a good thing to do. Which it is, really, important to know that kind of thing. But a a new lawsuit filed against Experian, a super huge credit bureau, says that the company is intentionally misleading consumers about their scores.

The big beef boils down to this: Experian advertises its credit reports as a way for customers to find out their credit scores. Which they do, in fact, issue you a credit score — it just is that the score they give out isn't the one lenders actually use to determine your credit-worthiness.

MSNBC reports on the suit, filed in a California federal court, explaining that the score used by lenders is called a FICO score, whereas the one you buy access to from Experian is one they calculate and have called a PLUS score.

One consumer is mad enough to file suit, saying that Experian is defrauding customers with their FreeCreditReport.com and FreeCreditScore.com services, and intentionally leading them to believe the score they will get is the one lenders take into consideration when you want to buy a McMansion or get a new credit card.

The three-digit FICO score is named after its developers, Fair Isaac and Co., and takes data from the three biggest credit bureaus in the U.S. — Equifax, Trans Union and Experian. Any consumer in the system will have one FICO score for each of the three bureaus.

While it is not clear what the variance can be between a FICO score and Experian's PLUS score, the lawsuit alleges that Experian should make it more obvious which score you're purchasing. Instead, the language used to market Experian's services glosses over the issue, claims the lawsuit.

Looking at FreeCreditReport.com even now, one could see how someone might think they're getting the score that matters to lenders. One such quote reads:

“DID YOU KNOW that three little numbers (your credit score) could end up saving you hundreds, or even thousands, of dollars? Lenders use credit scores to help them determine the "credit worthiness" of consumers applying for credit cards, lines of credit, or loans. The applicant's credit score will probably be used for figuring out whether he or she qualifies for credit, and if so, what terms and interest rates he or she will receive.”
 


 
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