Are Your Credit Scores Calculated Credibly?
06/03/2011 0 comments
No body knows! Or "Only a handful of employees at the Minneapolis-based Fair Isaac Corp. know and they won’t tell you — or government regulators. Then how do you know you’re getting a fair assessment of your credit practices? You don’t. You have to trust them.", this is from the latest article by John Wasik on Reuters Wealth.
Credit scores, or FICO scores, are widely used to decide your financial charges. Examples are
- Home mortgage applications & interest rates
- Auto loans
- Credit card applications
But only a few people in the world knows the formula to decide the scores? The credit scoring business is closed and opaque. What is the reason not to have a transparent disclosure?
A good analogy is your health conditions: would the medical industry withhold the secret formula to decide how healthy you are? What would happen if they do?
Why is then financial health different?
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