Service to Let Consumers See Credit Scores

Consumers will finally be able to learn their credit scores--the three-digit numbers lenders use to determine whether to grant loans and what interest rate to charge--under an agreement announced Thursday between leading credit scorer Fair, Isaac & Co. and credit bureau Equifax.

The companies said they plan to set up an online service within the next three months that will allow consumers to view their score, find out what factors were considered in creating it and how lenders might use the number in lending decisions.

Many details remain to be worked out, including how much the service will cost, what it will be called and which Web site will be used, said Fair, Isaac spokesman Craig Watts.

“At least we know who the partners are and the time frame,” Watts said.

For years, credit scorers have opposed giving consumers access to their scores, which are widely used by mortgage companies and other lenders to decide whether or not to make loans and how much to charge. Insurers, employers and landlords also use the scores to evaluate applicants.

Credit scorers had said the numbers were too difficult for consumers to understand and interpret properly. Scorers also worried that their proprietary credit-scoring formulas could be rendered less effective if consumers knew what factors influenced the numbers.

But many consumer advocates said more disclosure would help people learn how to improve their scores and better understand how credit decisions are made. Recent pressure from consumer groups and politicians who want more disclosure have forced a turnabout.

In California, lenders are required to explain to home-loan applicants how they used a credit score in a lending decision, thanks to a law passed last year. Congress also held hearings last year about whether to mandate disclosure of credit scores.

By June 2000, Fair, Isaac was rethinking its stance. It began allowing mortgage applicants to get details about their credit scores on its Web site at https://www.fairisaac.com. The company also posted a detailed list of factors that influence a credit score and said it was conferring with the three major credit bureaus to find ways to make scores more readily available.