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On Jan. 15, Experian sent a termination letter to Fair Isaac that will most likely end their almost six-year partnership with myFICO.com. myFICO is the consumer division of Fair Isaac and sells the widely used FICO scores and credit reports to consumers via their website. This move will make managing credit scores more difficult for consumers as it eliminates access to one of the three FICO credit scores, which are a core credit risk measurement tool used by lenders.
If the two parties cannot come to an agreement before Feb. 14, consumers will no longer be able to get FICO scores based on Experian data from myFICO.com or any other source. At the same time, Experian has extended its agreement with Fair Isaac to sell FICO scores to lenders and other businesses that use them to make underwriting decisions. This business-to-business component of their overall partnership represents a much larger revenue channel for each of the two companies.
This is the second such threatened termination and it comes during arguably the worst economic climate in the U.S. since the Great Depression; a time when consumers need more access to their personal credit score information, not less.
Experian will likely continue to sell their PLUS and VantageScores to consumers through their various consumer websites but without the myFICO agreement, consumers will have no way of obtaining their FICO score based on Experian data. Experian’s partnership with the myFICO division of Fair Isaac began in June 2003. They were the last of the three credit reporting agencies to allow for the distribution of FICO scores to consumers using their data.
Experian, Equifax and TransUnion all have separate data agreements with Fair Isaac, which allows the Minneapolis-based analytics giant to format and sell credit reports and FICO scores via myFICO.com. This arrangement provides the only outlet for consumers to get all three of their FICO credit scores in one location. Consumers will still be able to purchase their FICO scores generated from Equifax and TransUnion data after the 15th.
Fair Isaac filed a lawsuit against Experian, Equifax, TransUnion and VantageScore Solutions in the U.S District Court District of Minnesota in October 2006. In 2008, Equifax was released as a Defendant after the two companies agreed to significantly expand their relationship. Claims against the other two credit bureaus and VantageScore Solutions remain pending.
According to a source at Fair Isaac, the move comes as a “surprise that, particularly in a time of tremendous economic uncertainty, Experian would deny American consumers the ability to obtain their FICO scores.” The move, however, isn’t completely unexpected given the contentious nature of the lawsuit and the millions of dollars of credit score revenue that Fair Isaac recognizes each quarter from their partnership with Experian.
This story was originally published on Credit.com.
John Ulzheimer is a nationally recognized credit expert, president of Consumer Education for Credit.com and contributor to On The Money. Learn more about him at CreditExpertWitness.com.
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