FICO and NAR Debate Credit Scoring Model and Impact on Consumers

The National Association of Realtors® recently called on FICO, developer of the credit scoring model of the same name, to revise some of its computations. At issue is the alleged negative impact on consumers when banks and credit card companies unilaterally reduce or cancel credit lines, even when consumers are in good standing on those accounts. An NAR spokesman said that FICO's software is "unable to differentiate between innocent victims and people whose behavior genuinely merits reductions," and called the FICO model "archaic." Craig Watts, FICO's Public Affairs Director, told us that FICO's scoring models are not static. "They are constantly evolving, but each change reflects data over time, and users do not adopt new models immediately because of the cost and labor involved." Its...(read more)

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Source: http://www.mortgagenewsdaily.com/12202010_fico_nar.asp

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