"Subprime" scores: NextGen and Experians SureView

From

"Experian and Fair, Isaac Tweak Subprime Scoring"

http://www.experian.com/whitepapers/SubprimeScoring.pdf

I had NO idea that Fair Isaac's NextGen scores are subprime scores. This that this article is almost a year old.

Here's how bizarre their thinking is:

“Particularly with nonprime consumers,
once they’re on a creditor’s books, you
want to monitor [those accounts] closely,
because they can change so quickly,”
Ms. Haggag said. Rising unemployment
is especially threatening to people making
low wages, who make up “a good portion
of the subprime market,” she said."

So, how can ANY score tell you when somebody will become unemployed and when they'll find another job?

DUH!!!

"Ms. Haggag said that subprime lenders
must weigh profitability against risk. “You
can always adjust the product according
to risk,” she said, adding that issuers’
thresholds for risk differ considerably. For
example, a “bad” account (one likely to
go delinquent in 60 or in 90 days) might
actually seem “good” to some issuers
because of the opportunity to charge late
fees or raise interest rates. “That’s where
this market makes its money,” she said.

So true.

Why else would they charge $29 or $39 late and overlimit fees?

The fact that you paid late or went over the limit did not cost them a single penny. It's called charging for NOTHING.

What better way to make lots of $$$ for doing nothing than giving someone a $200 account, secured by $99, and then get $650 for fees and illegal interest charges.

Capital One - exempt from FCRA and Truth in Lending Act? (http://forum.creditcourt.com/discus/messages/346/346.html)

all of the teeth have been yanked out of the "bite" of FCRA, and the sound of its "bark" is becoming increasingly distant.....

consider the facts:--

lenders and the three repositories are not held responsible for violations, no matter how often they occur. consumer protection laws exist, but they are rarely, if ever, enforced.

FCRA provisides for consumers to make 100 words on their credit report, explaining mistakes, problems, extenuating circumstances relative to their borrower profile. today, this is a farce, as nobody reads credit reports anymore. all decisions are based upon score and score alone. you might as well write it on papyrus and sail it off to phaoroh's court in a clay collander.

i just qopffed out $17,000 to pay 3 credit cards to $0, and applied for a home equity line of credit. my middle score came in at 678, 2 points short of "yes," 680. lo and behold, cendant is reporting my first mortgage twice. they acknowledged their mistake, yet even with a "we're sorry, we don't know how to do our jobs" letter in hand, FICO scoring prevails.

conclusion:---

the lending industry wants somebody else to make decisions for them. they want this done as cheaply and expediently as puterly possible, and they don't want to take responsibilty when credit is extended to an unworthy candidate, or denied to another whose credential and references are impeccable. at the same time, they want to maximize profits, finding an excuse to price-gouge just about anybody they can, without breaking the law. FICO scoring has granted their every wish--- have your borrower, gouge them too, and never be held accountable under any circumstances. it's a federally mandated license to steal, and given the choice, most institutions engaged in businesses of making money will use it to maximum profitibility. this thing even takes discrimination lawsuits out of the picture; whether it discriminates or not, every applicant
is subject to evaluation by the same models, so none can claim to have been treated in a biased or preferential way. demographic application of racist policies may still be present [{UN}fair isaac's testimony before congress strongly suggest this is the case], but this can never be proven unless the scoring models are divulged, at least to federal regulators, if not to anyone else.

now that this industry has everything it could ever have wanted, it doesn't want anything to change. why should it?? class actions have started against fannie & freddie, and FICO is causing more defaults than it ever thought of predicting, but so long as interest rates stay low and property values remain high, the consituents will make settlements to keep cases out of court, and buy out the opposition. the real estate sector is the last leg this economy has to stand on. a drawn-out war with iraq, tough winter, inflation, or another major terrorist attack is all it's going to take to push the dogpaddle recovering economy back down in a big way, and once the real estate market lays an egg, see what FICO has left of our national nest egg to see us through. plug two or three of these bright preospects into the near-term, and join me tonight in half a litre of gin to salute the future. i hate winter, don't favor invasion of iraq, pray we don't have a repeat of sept. 11, and FICO locked me of out taking advantage of the lack of inflation as long as we enjoy it, to the tune of the lowest interest rates in my lifetime. 2 points short of the required score still means NO!

FICO can show contempt for the american consumer so long as the lending industry profits and the federal government remains brain-dead, or is bought off. enter the aspects i mention above, especially in concert, and the federal government will be forced to address the problem, first as a matter of integrity, secondly as a matter of economic survival. warning signs, which i identified and mentioned here 4+ years ago, along with my C- in economics 101 at harvard, have gone unheeded and unheard-- if this is the best {UN}fair isaac can do, perhaps i should put in for the nobel prize. complaints pouring into the ftc and occ are being ignored-- could it be that congress is overcooking our next depression, or have they been bought off, too?

food for thought. i'll stop posting now before i drink too much and make a real fool of myself.

as for the "overlimit" fee, i've always found that the credit card companies will dismiss the charge as a courtesy, so long as you don't go more than 60 days beyond the due date shown on your statement. i never pay late, though sometimes i don't receive a monthly statement at all, or a payment is slow and gets there a day or two after the post date, or not at all. usps is not reliable, especially in the boston area. i still get mail addressed to tenants who left years ago, some of it going back as far as 1987. my parents in vermont see mail for me once in a while, and the last time i maintained a permanent address there was february, 1979.

enjoy, and survive if you can----:cool: