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The www.FedPrimeRate.com Personal Finance Blog and Magazine

Friday, January 25, 2008

Can You Really Buy a Great FICO Score?

With every great industry comes subindustries; the housing industry is no different. From the traditional mortgage lending industry emerged the subprime mortgage industry. However, now that subprime lending is mainstream, companies who offer quick FICO fixes for individuals who have further damaged their credit through subprime borrowing abuses or other poor credit usage are now coming to the foreferont.

Yes, you can buy a good FICO score these days.

However, you might not be able to do it for long. These kinds of companies use legal loopholes to cosmetically establish good credit scores, and neither the Fair Isaac Corporation nor mortgage lending industry leaders are happy about it. These quick credit fixes are achieved by essentially attaching individuals with poor credit to the loans and credit accounts of others with good credit - and it's legal! This, opposers argue, will inevitably lead to more woes in mortgage lending scrutiny and foreclosures because people who really should not be approved for loans will be.

Furthermore, many think it to be unethical, as it is a false positive of sorts concerning one's creditworthiness. Fair Isaac is already changing it's formula to exclude some of these slick maneuvers from counting toward FICO score calculation. Industry whistleblowers are calling for further regulation. It seems like this 'insta-credit' subindustry might be of the "fly by night" sort with this level of opposition.

But what do I know - upon seeing the first episode or so, I predicted that the Power Rangers would flop, and I was absolutely sure that "Friends" wouldn't last.

Go figure...

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