Long live the Information Age.

The credit scoring Tower of Babel is about to fall.

It happened to private mortgage insurance, it happened to mortgage cost information and soon, revealing how information empowers consumers, you'll have easy access to your credit score, much as you can exercise your right to see your credit report.

State and federal legislation, credit reporting agencies' actions and new policies from large mortgage money suppliers are all converging on a mandate to release credit scoring information -- and consumer awareness is making it happen.

Thank the Internet for the awareness.

Credit scoring, offered primarily as the "FICO" credit-scoring system named for the San Rafael-based Fair, Isaac and Co., that has a stronghold on the market, is a statistical evaluation of how likely you are to default on a loan.

The higher the score, which ranges from 300 to 900, the lower the probability you'll default.

Until this year, you couldn't see your credit score unless your lender revealed it to you during a loan application. Lenders requests the score in about 75 percent of all mortgage applications as part of the credit report it obtains from one or more of the three national credit bureaus: Equifax, Experian, and Trans Union.

FICO has argued that you shouldn't see your credit score unless your all-wise-and-knowing lender is present to hold your hand and carefully explain your score in the context of your specific mortgage application and financial situation.

Consumers, even those with personal finance counselors, those who previously purchased a home and, those who comprise the majority of home buyers and simply do a sound job of managing their household finances, apparently are all just too daft to "get it".

Keeping score

Rather than detailing how credit scores rise and fall, FICO fretted that consumers armed with credit score knowledge would attempt to jimmy the system -- perhaps with financially disastrous results.

Let's say you've never missed a mortgage payment, you've never been late on your credit cards and are generally considered a no-risk, A-1 credit consumer.

To make your loan application bullet-proof you decide to "fix" your credit rating by paying off some small balances on high-limit credit cards. You cancel those cards and shift the balance, thousands of dollars, onto fewer cards in an effort to show meaningful consolidation.

Your application is denied.

Suddenly canceling many cards with small balances and then shifting all the debt to fewer cards effectively raises the ratio of your unpaid balances to the maximum credit lines available on fewer cards. To the bloodless credit-scoring software, it appears as if your financial situation has tightened.

Likewise, you could score low for not having enough credit cards or for paying off a loan too quickly, but your credit report won't reveal how your behavior affected your credit score.

While your credit report appears pristine, you could have to pay a higher interest rate or, worse, you could be denied a loan -- all because, well, you didn't know the score.

What FICO apparently didn't get is that consumers don't seek credit once in a lifetime and they aren't likely to jeopardize their ongoing credit needs by "fixing" the score for one loan. Duh.

Awareness, not ignorance, breeds responsible financial behavior.

In recent years, the Internet has been the catapult for attacks launched against self-appointed information gatekeepers who believe consumers can't think for themselves.

For example, tens of thousands of consumers flocked to Eloan.com earlier this year to get their scores as the online mortgage site briefly side-stepped FICO's "Ask, But Don't Tell" edict.

The site offered a comprehensive explanation of the factors that affect credit scores, including specific information about visitors' scores based on individual input.

In April, FICO blocked Eloan's access to credit scores, but by then the action was moot.

Settling the score

FICO's attempt to keep scores locked down only delayed the inevitable.

Building steam in the U.S. Congress to release credit scores to consumers is the Fair Credit Full Disclosure Act (HR 2856), sponsored by Rep. Chris Cannon, R-Utah.

Last month, California's Senate approved by an overwhelming 31 to 1 vote, Sen. Liz Figueroa's (D-Fremont) SB 1607, the state's effort to remove the veil of secrecy surrounding credit scoring. Consumers Union, publisher of Consumer Reports is one of the bill's supporters.

Meanwhile, two of the three major credit reporting agencies, Trans Union Corp. and Experian plan to offer their own brand of credit scoring information and Fannie Mae and U.S. Department of Housing and Urban Development's Federal Housing Administration (FHA) plan to do likewise.

The writing is on the Internet's electronic walls.

Consumers aren't about to be left twisting in it when they get wind of information that affects their bottom line, information they need to make financial decisions, and information that's rightfully theirs.

Disclosing credit scores isn't the end.

It represents the latest victory march against closely-held fortresses of information consumers have a right to know.

Tight-fisted information misers who continue to build data depots shrouded in faux veils of esoterica? Your days are numbered.

New home construction consumers can't inspect, predatory lending's small print and so-called Internet "privacy" are all on shaky ground.

If you don't have a consumer concentric model to serve consumers, you simply don't get it. Consumers do.

They are informed to the hilt and they aren't going to take it anymore.

Published: June 2, 2000

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.