FICO

It’s not a surprise that Fair Isaac, the creator of the good ole FICO® score got the go ahead from the court to pursue it’s lawsuit against the credit bureaus for trademark infringement. If credit score terms like beacon, empirica, and FICO® are not confusing enough consumers have to also figure out what role Vantage score (Created by America’s three major credit reporting companies) plays in the overall landscape when it comes finance.

The majority of business credit lenders acrosss the country continue to use FICO® as the their overall risk assessment tool for credit decisions but many of also adopted their own internal scoring system to compliment FICO®. In addition FICO® recently launced FICO® 08 to the mix leaving consumers in the dark as usual.

From debt to credit limit ratios, date of last activity, open accounts, closed account, new credit, old credit, payment history, credit profiling, mathematical algorithms, and on and on I’m starting to wonder if the credit system will soon be just as complex as our tax system.

So how does this lawsuit affect you?

In a nutshell FICO® is asserting that Transunion and Experian are misleading consumers with Vantage score.  (Equifax has already settled out of court with FICO®) It will be very interesting to see the outcome of this court battle. In my opinion the easier the credit scoring system can become the better it is for you and I.

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About the Author

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for AllBusiness, a subsidiary of Dun and Bradstreet and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in the SBA Community, American Express Small Business, Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.