The Great Change: Turning Cathy into a Lawyer

By my understanding of how FICO works, your FICO score wouldn't be affected by having an extra couple thousand dollars in revolving loan, unless that credit card were your only credit card and the extra loan value put you substantially close to the max credit line on the card. Since you were out in the real world for years, I doubt that would be the case, given the way credit card companies frequently increase credits lines whether you want them to or not.

A couple guesses of what might have happened:

1. You paid off or closed some old accounts you don't use.

2. Your student loan lender makes its own calculation of current credit card debt v. current income and uses that in its creditworthiness analysis. This wouldn't be FICO based, but would be calculate by the lender directly from the data on the experian report.

3. Your student loan lender considers bar loans to be inherantly riskier than other loans to law students-- which is reasonable, since most people who have high paying jobs already lined up don't need to take out bar loans since firm jobs usually pay for BarBri and pay a summer stipend.

4. You hit some sort of threshold for aggregate private student loans.

I wouldn't necessarily believe anything the woman from the lender tells you about their rate setting process (ie blaming FICO): she probably isn't high enough up the chain to understand it, and even if she does, her only goal is to convince you that there's nothing she can do to lower your rate.

# 2 - 4 are the only ones plausible, but if that's so, the lender outright lied (and several times). Unfortunately since no one will tell me my FICO score (yet they will affect my financial well-being as a result of it) I'm left with no answers other than what she suggested.

One of the three credit bureaus (I don't remember which one) will sell you the FICO score based on their data for an extra 5 bucks or so over the cost of a credit report. (the others also sell a "credit score", but it isn't the FICO score that they actually provide to creditors). Check around the web sites for the three bureaus and they'll tell you what they'll sell you-- though knowing the score probably won't be particularly useful here.

I would need to know the score they used this year as well as the one they used last year.

But I strenuously object to MY HAVING TO PAY FOR MY OWN INFORMATION. That FICO score would not exist were it not for me; it's a number of my creation. Therefore I should be entitled to own and control it, and others should have to pay ME for access.

Agreed... Like I said, knowing your current number won't help you much in your current situation...

As for you objection to paying for your own information-- I couldn't agree with you more (at least with respect to free access)... But the fact is that's not the way the system is set up, and nothing short of an act of congress is going to change that. So if you do want the info, you'll have to pay for it (though the score really isn't very useful).

Of course, your other option would be to try applying for a loan with a different lender, which might give you a different rate.

Fundamentally, if the first lender received a credit report with correct information on it (and you say that there was no error on your report), then it is unlikely that anything that you can do in the next month or so will change their credit decision. The system is set up so that small changes over a month don't make that much of a difference.

Mark

Not to blow a gasket here, but...

I wonder if your credit score is actually your information, meaning information that you own, rather than information that is about you. If there were some kind of law that would allow you to see your credit score, I wonder what the implications of that would be with respect to all sort of information about you floating around that you don't necessarily own. It's frustrating, but are there any legal arguments that can be made to get your credit score?

Anyway, I digress...

So I don't think Japan has the same sort of evil equivalent to the credit score, at least not out in the open. It's still a mostly cash-based society, and credit cards are linked to bank accounts and they get automatically withdrawn every month (although revolving options do exist). Not that I've ever tried to get a loan here.

Credit scores are information about you that is generated by (and propietary to) the generator. They are calculated based on information collected by a credit bureau. The credit bureau is regulated in a manner that gives people certain rights with respect to how the bureau may use (and must correct) information about them. Right now, there arn't similar rights with respect to credit scores, though I see little reason why congress couldn't choose to create such rights. On the other hand, a right to know your credit score isn't terribly useful, and a right to correct a credit score (separate from correcting an innacuracy in the underlying set of information on which the score is based) would more or less defeat the point of a credit score.

Mark

> On the other hand, a right to know your credit score isn't terribly useful, and a right to correct a credit score (separate from correcting an innacuracy in the underlying set of information on which the score is based) would more or less defeat the point of a credit score.

I think it would be useful. It would be useful to me to know what my score was so I could control it and know why lenders are making decisions as they are.

As for the point of a credit score, it's already demonstrated itself to be useless. I'm the same credit-worthy person I was, dealing with the same lender. But because the score somehow ended up different, I'm treated like I'm a different person. How is that reasonable?

Why are credit scores "your information"? Did you devise the algorithms and formulas that generate a FICO score? "Your information" - the inputs - are all available annually for free for each of the 3 agencies. www.annualcreditreport.com

Love the BLOG!

Cathy...

Lenders need to have some system for taking the raw data that they receieve from the credit bureaus and converting it into a form that's useful for making a credit decision. If they didn't outsource the conversion to Fair Issacs, they would still need to make some sort of similar conversion in-house. Either way, I don't know why they should have an obligation to explain their complete creditworthiness analysis model to you-- that should be propriary, both as a trade secret for competitive reasons and because making it publicly known would allow people to game a system that makes generalizations based upon limited information about a person. If the lender is getting correct credit report information (and you say that they are) but based on that makes you a credit offer that you don't like, then you need to either shop lenders, try another financial strategy (like spending savings) or recognize that you are getting the best offer the market will give you and take it. I don't think it makes sense to argue that the bank should only be able to alter its risk assessment of you if you miss some payment to it or to some other creditor. The point of the score is to predit, useing gross generalizations, who might start missing payments before they even do start missing payments (which isn't me saying that you are likely to be missing payments, only to say that generalizations by necessity arn't 100% predictors of any one sample point). This isn't something that could be put under the "control" of the consumer.

Mark