A Fight Over Credit Scores Turns Into All-Out War
For years, rival executives have been fighting behind the scenes over who controls the most important number in every American’s financial life: their credit score.
Now, a $10 fee has tipped the sides into open warfare. To the victor will go the power to determine who gets mortgages, car loans and credit cards in the U.S. and how much they will pay for them.
The battle pits Fair Isaac, the creator of the dominant credit-scoring algorithm, against three companies: Equifax, Experian and TransUnion. Those three companies supply the credit files that go into Fair Isaac’s score, or FICO score. They are eager to break Fair Isaac’s grip on determining creditworthiness. And they think they can do it by offering an alternative, a credit score they created and named VantageScore.
The FICO score has had such a lock on the business for so long that many think of it as a government statistic. The FICO score is used in about 90% of consumer-lending decisions in the U.S., according to industry analyst estimates, and Chief Executive Will Lansing is one of the highest-paid executives in the country.
WSJ