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FICO 08 Found to be Illegal

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DENVER (Map) - DENVER, Feb. 22 /PRNewswire/ — Fair Isaac Corporation (FICO) is the company which designs and implements the most universally accepted personal credit scoring model used today. It is commonly known as the FICO score. The three major credit reporting agencies, Equifax, Experian, and TransUnion, utilize a FICO model which considers “authorized user” accounts when generating a person’s credit score. This model is in compliance with the Equal Credit Opportunity Act (ECOA). The legislative intent and stated purpose of the ECOA was and remains in force to protect consumers from discriminatory and unethical practices in lending.

Nevertheless, FICO recently proposed a new scoring model, dubbed FICO ‘08, which will completely disregard authorized user accounts, as they appear on an individual’s personal credit file. This new scoring model is projected to adversely affect 41 million Americans with respect to their credit scores.

Let us be clear, the proposed FICO ‘08 scoring model is illegal, pursuant to the Equal Credit Opportunity Act. One can review the following pertinent provision of the ECOA and find this to be true:

(6) Credit history. To the extent that a creditor considers credit history in evaluating the creditworthiness of similarly qualified applicants for a similar type and amount of credit, in evaluating an applicant’s creditworthiness a creditor shall consider:

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(i) The credit history, when available, of accounts designated as accounts that the applicant and the applicant’s spouse are permitted to use …

As anyone can discern, the law clearly states that “any” account which an applicant is permitted to use must be considered. This certainly envelopes authorized user accounts. With that in mind, it is only reasonable to forecast a windfall of class litigation that very well may affect the bottom lines at the Fair Isaac Corporation, the credit reporting agencies, and any lending or banking institution that uses the new FICO ‘08 scoring model. This is why only one credit reporting agency was set to implement the changed model back in September 2007. The other two were going to sit back and wait for the fallout.

The reasons given for the so-called need for this change are many, but they are in essence a call for relief from the mortgage industry. After the sub-prime mortgage industry fell through the bottom, they needed an explanation for their shareholders. Rather than admit to the truth, which was that they were approving applicants with low FICO scores at 100% of a property’s value and at nearly 60% Debt to Income Ratios, they blamed a small niche of consumers who knew how to operate astutely under the FICO model to increase their scores within the confines of the law.

Equifax has stated that they will not use the model.  However, if the other two credit reporting agencies enact the change, it would not affect most consumers until sometime in mid 2008 if they apply the change in a retroactive nature. The fallout could be substantial as the changeover will undoubtedly exacerbate the ever worsening financial and credit positions of the average American consumer. An onslaught of class action lawsuits and wasted tax payer money will certainly follow as a result.

Companies like Apex Credit Services, LLC remain optimistic and do not foresee FICO ‘08 moving forward as proposed in light of its illegality and as such, they plan to continue to offer account trade lines to Americans in need of a legal credit score boost.

     - Created By:        APEX CREDIT SERVICES (http://www.apexcreditservices.com)

Apex Credit Services, LLC In The News For Tradelines

http://www.prlog.org/10052638-authorized-user-accounts-still-scored.html

Authorized User Accounts Still Scored

Apex Credit Services, LLC Dispells The Myth of FICO 08
Source: Apex Credit Services, LLC Feb 22, 2008 02:48:40

FOR IMMEDIATE RELEASE

PRLog (Press Release) – Feb 22, 2008 – Charleston, West Virginia

Feb. 22, 2008

J. Wade Barnette, Managing Member

Fair Isaac (hereinafter, “FICO”) is the company which designs and implements the most universally accepted scoring model today. It is commonly known as the FICO score. Today, the three major credit reporting agencies, Equifax, Experian, and Trans Union, permit FICO to apply models to their data. All consider “authorized user” accounts and are in compliance with the Equal Credit Opportunity Act (“ECOA”).

Nevertheless, FICO proposed in June of 2007 a new scoring model which would completely disregard authorized user accounts. It has not and may never happen. Equifax has recently stated that they will not allow FICO to apply this model to their data. The other two credit reporting agencies are set to “review” the model at some point in 2008 however, each and every request as to whether any credit reporting agency is going to permit this model to be applied to their data is garnering a more tenuous and ambiguous response.

Why, because this proposed model is illegal pursuant to the ECOA. One can review the following pertinent provision of the aforementioned Act and find this to be true:

(6) Credit history. To the extent that a creditor considers credit history in evaluating the creditworthiness . . . in evaluating an applicant’s creditworthiness a creditor shall consider:
(i) The credit history, when available, of accounts designated as accounts that the applicant and the applicant’s spouse are “permitted” to use . . .

As anyone can discern, the law clearly states that “any” account which an applicant is permitted to use must be considered. This certainly envelopes authorized user accounts. With that in mind, it is only reasonable to forecast a windfall of class litigation for any creditor who uses the aforesaid model.

In short, using this model just doesn’t make sense from a legal or business perspective. This is why FICO 08′ has yet to happen. In all honesty, we at Apex Credit Services, LLC cannot envision FICO 08’ moving forward as proposed in light of its illegality and as such, we will continue to offer our account tradelines in the spirit of the ECOA.

http://www.apexcreditservices.com

# # #

Apex Credit Services, LLC is a licensed, registered and bonded Credit Services Organization. Moreover, it is a proud member of the Better Business Bureau. Beyond its corporate mission, ACS, LLC is an advocate for consumer credit protection.

# # #

http://www.i-newswire.com/pr152832.html

(I-Newswire) - Charleston, West Virginia Feb. 22, 2008 J. Wade Barnette, Managing Member Apex Credit Services, LLC Fair Isaac ( hereinafter, “FICO” ) is the company which designs and implements the most universally accepted scoring model today. It is commonly known as the FICO score. Today, the three major credit reporting agencies, Equifax, Experian, and Trans Union, permit FICO to apply models to their data.  All consider “authorized user” accounts and are in compliance with the Equal Credit Opportunity Act ( “ECOA” ). Nevertheless, FICO proposed in June of 2007 a new scoring model which would completely disregard authorized user accounts.  It has not and may never happen. Equifax has recently stated that they will not allow FICO to apply this model to their data. The other two credit reporting agencies are set to “review” the model at some point in 2008 however, each and every request as to whether any credit reporting agency is going to permit this model to be applied to their data is garnering a more tenuous and ambiguous response. Why, because this proposed model is illegal pursuant to the ECOA. One can review the following pertinent provision of the aforementioned Act and find this to be true: ( 6 ) Credit history. To the extent that a creditor considers credit history in evaluating the creditworthiness . . . in evaluating an applicant’s creditworthiness a creditor shall consider: ( i ) The credit history, when available, of accounts designated as accounts that the applicant and the applicant’s spouse are “permitted” to use . . . As anyone can discern, the law clearly states that “any” account which an applicant is permitted to use must be considered. This certainly envelopes authorized user accounts. With that in mind, it is only reasonable to forecast a windfall of class litigation for any creditor who uses the aforesaid model. In short, using this model just doesn’t make sense from a legal or business perspective. This is why FICO 08′ has yet to happen.  In all honesty, we at Apex Credit Services, LLC cannot envision FICO 08’ moving forward as proposed in light of its illegality and as such, we will continue to offer our account tradelines in the spirit of the ECOA. http://www.apexcreditservices.com Apex Credit Services, LLC 2919 Shadyside Road Saint Albans, WV 25177 304-727-4818 If you have questions regarding information in this press release contact the company listed below. I-Newswire.com is a press release service and not the author of this press release. The information that is on or available through this site is for informational purposes only and speaks only as of the particular date or dates of that information. As some companies / PR Agencies submit their press releases once per week/month or quarter, make sure check the official company website for accurate release dates as our site displays the I-Newswire.com distribution date only. We do not guarantee the accuracy or completeness of information on or available through this site, and we are not responsible for inaccuracies or omissions in that information or for actions taken in reliance on that information.

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Apex Credit Services, LLC

Apex Credit Services, LLC Explores FICO 08′

Los Angeles-Long Beach, CA (1888PressRelease) February 23, 2008 - Fair Isaac (hereinafter, “FICO”) is the company which designs and implements the most universally accepted scoring model today. It is commonly known as the FICO score. Today, the three major credit reporting agencies, Equifax, Experian, and Trans Union, permit FICO to apply models to their data. All consider “authorized user” accounts and are in compliance with the Equal Credit Opportunity Act (“ECOA”).

Nevertheless, FICO proposed in June of 2007 a new scoring model which would completely disregard authorized user accounts. It has not and may never happen. Equifax has recently stated that they will not allow FICO to apply this model to their data. The other two credit reporting agencies are set to “review” the model at some point in 2008 however, each and every request as to whether any credit reporting agency is going to permit this model to be applied to their data is garnering a more tenuous and ambiguous response.

Why, because this proposed model is illegal pursuant to the ECOA. One can review the following pertinent provision of the aforementioned Act and find this to be true:

(6) Credit history. To the extent that a creditor considers credit history in evaluating the creditworthiness . . . in evaluating an applicant’s creditworthiness a creditor shall consider:
(i) The credit history, when available, of accounts designated as accounts that the applicant and the applicant’s spouse are “permitted” to use . . .

As anyone can discern, the law clearly states that “any” account which an applicant is permitted to use must be considered. This certainly envelopes authorized user accounts. With that in mind, it is only reasonable to forecast a windfall of class litigation for any creditor who uses the aforesaid model.

In short, using this model just doesn’t make sense from a legal or business perspective. This is why FICO 08′ has yet to happen. In all honesty, we at Apex Credit Services, LLC cannot envision FICO 08’ moving forward as proposed in light of its illegality.

http://www.apexcreditservices.com

AUTHORIZED USER TRADELINES WORK!!!

Authorized user account tradelines are still effective under the FICO scoring model.  Much misinformation to the contrary has been spewed forth by companies performing illegal acts such as adding mortgage and automobile account tradelines to consumer credit reports.  The fact is that authorized user accounts are still scored just as any account otherwise, are cheaper, and more importantly, are legal.

The Equal Credit Opportunity Act prescribes that all accounts upon a consumers credit reports which that consumer is permitted to use must be scored under any scoring model.  Otherwise, it’s an invalid model and any creditor which would use it would be subject to the civil penalties of the Equal Credit Opportunity Act.  As such, no one is using FICO 08′ and by extension, authorized user accounts are still effective as ever.

For more on this visit http://www.apexcreditservices.com and click on “FICO 08′ Explained.”

Finally, do not fall prey to these so-called companies which say they can add “joint” and “individual” accounts.  Even assuming that was necessary, it is illegal and you could be culpable for fraud insofar as these are fictious accounts or ones that have backdated histories.  Furthermore, most of these accounts have no history and by extension, they do little to nothing to improve your scores.  Don’t throw your money away on this illegal and ineffective garbage.

Come to Apex Credit Services, LLC; a licensed, registered, and bonded Credit Services Organization and a proud member of the Better Business Bureau.  Contact us at http://www.apexcreditservices.com or 1-888-727-4818.

Apex Credit Services, LLC - Credit Repair

Reporting a Balance on a Credit Report after Bankruptcy Discharge Part II

Generally, reporting a balance influences the debt to credit ratio, which typically amounts to 1/3 of what your credit score is based upon. While many creditors try to argue that they are simply reporting truthful information of what they are owed and what remains on their books, they entirely miss the boat.

A credit report has nothing to do with the creditors’ financial books or what they consider due and owing to them. Rather, a credit report concerns the risks of the borrower in terms of outstanding debts the debtor remains personally liable for. It concerns what debts are outstanding, at a snap shot in time, that are enforceable against the debtor personally.

If a creditor reports a balance due on a credit report after bankruptcy, it’s basically a broadcast to others pulling the report that the debtor still remains personally liable on the debt. This is absolutely false since the discharge injunction of 11 USC 524 states that no creditor can enforce a pre-petition debt personally against the debtor.

Fortunately, the Judges in the San Diego Bankruptcy Courts and across the nation are beginning to understand how these creditors operate. On November 27, 2007, a Bankruptcy Judge in San Diego issued a ruling against Honda who tried to dismiss a lawsuit against them for credit reporting in an attempt to collect a debt.

The Judge denied the motion to dismiss stating, “In asking for dismissal, defendant overstates the law involving the interplay between credit reporting and violation of the discharge injunction. In Irby v. Fashion Bug (In re Irby), 337 B.R. 292, 295 (Bankr. N.D. Ohio 2005), the court acknowledged that there are certain situations in which reporting a debt can be considered an act suffcient to violate the discharge injunction, “if the act of reporting a debt was undertaken for the specific purpose of coercing the debtor into paying the debt, a violation of the discharge inunction could be established.” Id. If plaintiff can prove that Honda inaccurately reported or failed to update the statute of the debt for the purpose of coercing payment, notwithstanding the plaintiff’s discharge, which would essentially amount to lying in passive wait, then this may be a violation of the discharge injunction. Honda’s motive in making a credit notation is material. In re Singley, 233 B.R. 170, 174 (Bankr. S.D. Ga. 1999)(automatic stay violation case in which court denied summary judgment finding that “even if it is true that movant’s report to the credit bureaus contains truthful information that is a matter of public record, such a report, if made with the intent to harass or coerce a debtor into paying a pre-petition debt could violate the automatic stays). Rule 7008 is simple notice pleading. The complaint puts defendant on notice of a cognizable claim for contempt due to violation of the discharge injunction by an action or inaction intended to collect a discharged debt. However, the complaint seeks injunctive relief and there already is a statutory injunction in place under section 524. Nonetheless, taking all the allegations in the complaint as true, the defendant’s motion to dismiss is DENIED.

This decision comes a week after another Judge in San Diego issued a similar decision denying a motion to dismiss in a different matter. While these cases still remain pending, the creditors are now going to need to show why their reporting was not an act to collect a debt. Considering there are no laws, regulations, or other trade, credit, and industry standards which allow such conduct, its going to be real amazing to see what excuse they can come up with for going out of their way each month to report a balance due.

Of course, there is no excuse, and in time, and with a little litigation, Honda will soon account to the Court over how much money it has collected over the past 5 years. Hmmm, no legitimate legal reason to upload false balances, but for some reason Honda has collected tons of money on discharged debt? You make the call.

Apex Credit Services - Credit Repair

“Legal Aid” Scam Victimizes Thousands Across the Country

The New York Times recently reported a story about a multi-state legal services scam operated by two brothers.  The brothers placed advertisements in newspapers, in yellow pages and on Craigslist offering discount legal services.

The hook - all of the advertisements included the term “legal aid” or “legal aide.”   Individuals who called one of these fake “legal aid” offices ended up talking to a boiler room office in Colorado staffed by convicted felons.

Legitimate legal aid offices, of course, offer legal services provided by licensed lawyers who live and work in a local jurisdiction.

This article resonated with me because over the years I have met with many debtors who lost hundreds or thousands of dollars at the hands of flim flam artists offering “debt relief.” Most often these situations involved pending foreclosures in which the paralegal service or foreclosure prevention service would take $500, $750, $1,000 or more, then file a 2 page emergency petition as a pro se bankruptcy filing.

The victim often had no idea that a bankruptcy case had actually been filed, would often not realize what had transpired until after the 341 hearing or even as late as confirmation, at which time no post-petition mortgage payments had been made and no trustee payments had been made.

The point here: if you are facing foreclosure or some other financial problem, you get what you pay for.  Stay away from “paralegal services” and stay away from anyone who promises non-judicial remedies to legal problems like lawsuits, wage garnishments or foreclosures.

Just because someone says he is with “legal aid” or the name of the company has “legal” or “law” there is no guarantee that you are with someone who is reputable.   Whether you have money or not - buyer beware!

Apex Credit Services, LLC - Need An Attorney?

National Association of Consumer Advocates
Just look for your state and select from the choices given:

http://www.naca.net/

Apex Credit Services, LLC - Credit Problem Signs

Using credit cards unwisely can lead to a mountain of credit card debt that’s nearly impossible to overcome. But how do you know if you’re using your cards unwisely? Here are some ways to tell you’re for credit card debt.

1. You use credit to meet basic needs

Your income should be used to buy everyday items like food, clothing, and gas. Having to use credit cards to cover these types of purchases is a sign of financial trouble.

2. You transfer balances to avoid credit card payments

There are times when a credit card balance transfer makes sense, like to consolidate credit card balances or to get a lower interest rate. However, frequently transferring balances instead of making credit card payments is a red flag.

3. You skip one credit card bill to pay another

Prioritizing credit card payments is wise. But skipping payments is always unwise. If you consistently find yourself too strapped for cash to make your credit card payments, you are already in credit card trouble.

4. You avoid or ignore credit card statements

If only wishing away credit cards actually made them go away. Pretending your credit card debt doesn’t exist only gives it time to grow. Facing credit card debt sooner gives you the opportunity to tackle debt before it gets out of control.

5. You charge more than you pay

Imagine trying to fill a hole while someone shoveled out more dirt than you put in. Your hole would never get filled would it? It’s the same with debt. If you’re charging more than you’re paying, your credit card debt will always continue to increase.

6. You don’t have an emergency fund

If you don’t have an emergency fund, you’ll feel forced to use your credit card in emergency situations. Credit card debt created because of large, unexpected expenses can be hard to pay off, especially if your budget is already stretched.

7. You don’t have a plan to pay off your credit card debt

You know what they say, “Failing to plan is planning to fail.” If you’re not actively working to pay off your credit card balances, you could end up unnecessarily paying on the cards for years to come. Whether you have excessive credit card debt or not, you should always have a plan to pay off your balances.

8. You use credit to “afford” expensive items

The allure of credit is that it tricks us into thinking we can afford to buy more than we really can. Truth is, only extra income or lower expenses (or both) enables you to afford more expensive items. Incurring credit card debt to maintain a lifestyle you really can’t afford isn’t a wise decision for your future income.

9. You have past due accounts

If you have credit cards that are currently past due, you’ve probably run into unfortunate financial trouble that’s keeping your from making payments. Remember, the more past due your accounts become, the harder it will be to bring them current again. Take a look at your monthly budget for money you could spend to get your credit accounts back on track.

10. You have maxed out credit cards

If your credit cards are all maxed out, you’re not headed for credit card debt, you’re already in it. What next? Make a decision to pay off your credit card debt and to make wiser choices about using your credit cards in the future.

Apex Credit Services - Watch Out for Debt Collectors

Collection notice on old record club account uses a four-letter word (stolen from MSNBC)

BUFFALO, N.Y. - A collection agency tried to collect a $16.96 debt with an letter that addressed its recipient with a four-letter word for excrement. “Dear S—,” began the letter, attempting to collect from an old record club membership. The word was spelled out in the letter, which arrived in an envelope addressed to “S— Face.”

“I’ve never seen anything quite so brazen,” said attorney Kenneth Hiller.

He said his client plans to sue Nationwide Collections Inc. of Fort Pierce, Florida, next week.

Under U.S. law, debt collectors are not allowed to use profanity to collect a debt, Hiller said, nor are they supposed to threaten legal action over such a small amount.

Nationwide President Phillip McGarvey said the October 2007 letter was automatically generated after his company bought about 350,000 Columbia House accounts. “S— Face” is the name under which the account was opened and the way the coupon to start the club was filled out, he said.

Hiller’s client has signed an affidavit saying he never signed up for the music club membership under that name.

“It looks bad to the observer who is not familiar with the industry,” acknowledged McGarvey, “but anybody who understands the volume would understand how this could happen. …You’ve also got people filling in famous people’s names.”

Vantage Score

Source: Money Musings

 

One of the newest animals on the credit-score horizon is the VantageScore^®. If you pay much attention to the credit world, you’ve probably heard about it: It’s the credit industry’s first genuine shot at creating a single, ubiquitous formula for rating your credit data from the three major bureaus (Experian, Equifax, and TransUnion).

As you might imagine, VantageScore is a three-digit credit score. (What rioting might ensue if the agency suits varied from three-digit scores, anyway?) Here’s a quaint snippet of description from Experian’s website:

VantageScore is the credit industry’s first credit score developed jointly by the three national credit bureaus. This innovative new approach to credit scoring simplifies the credit granting process for consumers and creditors by providing a consistent, objective score to the marketplace.

Your VantageScore will be a two-part entity. The first part — the numerical one — will range from 501 to 990. The higher the number, in theory, the lower the risk you are to lenders. The second part of the VantageScore assigns a letter grade from A to D, and then F. The ranges break down thusly:

Letter Rating	Score Range	Category
A	901-990	Super Prime
B	801-900	Prime Plus
C	701-800	Prime
D	601-700	Non-Prime
F	501-600	High Risk

Great. The first thing that jumps out at me? It’s the fact that, as a credit agency, you can be assured you have a promising business environment when you can label the average Joe Blow, C-rated, debt-laden consumer as “Prime.” That, Dear Reader, says a lot about our world. (According to the Bankrate article “New Credit Score Now Online” (July, 2006), more than two-thirds of all consumers will qualify for a VantageScore grade of “C” or higher.)

Just because it was “developed jointly” by the three agencies doesn’t mean that you’ll see the same VantageScore if you acquire it from each one. Sure, the algorithm for computing your VantageScore (that’s what the bureaus locked heads on) will be the same when each bureau is doing the math. But if each credit bureau has different data on you (highly likely), then your scores will still vary (just like your FICO) across the board.

As consumers, we’re told that the VantageScore will be more “friendly” to our needs. Pardon me if I’m highly skeptical. Although, if by “friendly” these guys mean “something else about your life that you’ll have to pay to see,” then I guess they’re right. Will it catch on? Who knows. Will the credit bureaus make more money from it? Almost certainly. They’ve already made $5.95 from me.

Right now, as best I can tell, the only bureau that offers to let you see your VantageScore is Experian. They offer it for $5.95. Just for kicks ‘n’ giggles, I forked over the six bucks tonight and caught a glimpse of the Credit Bureau Profit Tool that is VantageScore.

Checking the VantageScore

The online application was pretty standard stuff, if you’re familiar with requesting things like credit reports on the internet. You’ll have to divulge your name, address, SSN, employer, and so on.

The second screen prompts you with four multiple-choice questions relating to information that’s currently on your credit report.

Plug in your credit card information at the next screen, click a “Yes, I Know What I’m Doing” button or two, and your VantageScore report will shine forth in all its . . . understated . . . glory.

Ouch. 753? A grade of “C”? I’m dubbed a “medium low” risk by lenders?

Well, yes. Of course.

That’s what playing the zero-percent credit card arbitrage game will do to your credit score. And no, it doesn’t concern or bother me. The crammed-full credit card balances that cause that sagging VantageScore will earn me interest of about 13 times the cost of checking my VantageScore. And that’s just this month. And for doing pretty much nothing.

In any case, I’ve done my part to pad the pockets of the credit bureaus one more time. Finding out your own VantageScore is a pretty easy task, and it’ll cost you less than a six-pack of decent imported beer.

Why (and how much) the VantageScore matters to consumers, though, is still anyone’s guess.