Experian plans to sell credit scores by July 1, along with a program that will allow consumers to see, in real time, how their credit scores would be affected by closing accounts, paying off balances and applying for new loans. Equifax and Trans Union don't do anything nearly as sophisticated as that, although they explain in general terms how a score was calculated and what steps a consumer can take to improve it. Rhyming scheme Fair, Isaac popularized credit scoring in the early 1980s when it began working with the Big Three to develop an industrywide scoring model. The credit bureaus have their own names for the scores when they market them to lenders. Many people in the lending biz just call them FICO scores.
Lenders use the scores to decide whether to lend money and on what terms.
A mortgage broker, for example, might turn down anyone with a score below 550, lend money at a high interest rate to people scoring between 551 and 600, and at lower rates for applicants scoring higher. For years, credit bureaus kept scores secret from consumers because Fair, Isaac didn't want to open the door to competitors, and it didn't want consumers to figure out how to hack higher scores. But when California mandated that credit bureaus disclose scores to Californians, the credit bureaus embraced the concept of selling credit scores to consumers for a fee. Reason codes will explain that you are penalized for making late payments, or are borrowing from a finance company rather than a bank, or because you have too many credit cards or too many accounts with balances or too many accounts without balances. U.S. Highway 1, North Palm Beach, Fl.