Veil is lifted on your rating as a mortgage applicant

WANT TO know your score? Now you can have it. And better yet, you can understand it.

Kept secret from homebuyers and mortgage applicants for years, individual credit scores became readily available for the first time this week. Last Monday, the developer of the dominant credit scoring system - Fair, Isaac & Co. - teamed live online with giant credit bureau Equifax to provide FICO scores and other personal credit information to consumers nationwide.


FICO scores are what the vast majority of American mortgage lenders use to evaluate home loan applicants' creditworthiness. The scores are based on complex statistical models that analyze the electronic credit files maintained on virtually all adults in the United States and other countries.

The scores range from the 300s to about 850, with higher scores indicating lower risk. Many lenders reserve their most favorable quotes of rates and fees for applicants in the upper FICO score ranges - 700 and above. Mortgage applicants in the low 600s and below get progressively higher rate quotes and are charged higher loan fees. FICO scores, in other words, often determine what you pay for the money you borrow.


Under long-standing contractual agreements among Fair, Isaac and the three big national credit bureaus - Equifax, Trans Union and Experian - FICO scores were kept secret from consumers. But mounting consumer pressure - and legislative moves at the state and federal levels - forced Fair, Isaac to rethink its policies late last year.

California mandated disclosure of credit scores to all borrowers who request them, beginning July 1. Federal legislation that would do the same thing nationwide is pending in both houses of Congress.

This week's launch of what the two sponsoring companies call the "ScorePower" service should eliminate the controversy over FICO score secrecy.

For a $12.95 charge on a major credit card, anyone can now obtain not only an Equifax credit report online, but also a current FICO score - accessible for 30 days - plus personalized guidance on the key reasons for the score. The service also will provide a graphic representation showing how you stack up against all other borrowers and specific recommendations on what you can do to raise your score.

A final feature of the service involves a toll-free number for you to speak with Equifax staff who will answer questions about your credit profile and FICO score. At least in its initial stages, the service will be available only online, at either or The two companies say they have taken extraordinary steps to make the new service secure from Internet interlopers or fraud.

To access your credit data, you'll have to pass through what Equifax Vice President J. Michael Cummins called an "interactive identity authentication process." The authentication program will ask a series of questions involving credit-file information - consumer loan balances, names of lenders, etc. - that only Equifax and the holder of the actual credit accounts would be able to answer.

The authentication system is "sophisticated enough" to screen out someone in possession of another person's wallet, credit cards and Social Security number who is seeking illegal access to a credit file, Cummins said.

With easy access to FICO scores now a reality, how might consumers use them? Cheri St. John, general manager of Fair, Isaac, envisions development of an entirely new level of consumer awareness of credit issues and improved management of household credit.


"What we are hoping is that this will allow people to proactively manage their credit," St. John said in an interview. With the personalized guidance available through the ScorePower service, people will know precisely how to raise their scores - whether through paying off balances on certain credit cards or even expanding their use of credit.

Although the new service is the first to offer the actual FICO score that lenders obtain and use in credit decisions, it is not the only online commercial source of credit scores.

At least two others - www. and www.worth - offer other types of scores that analyze and quantify one's credit standing. For some consumers, the other Web sites can be confusing. For example, a Washington area homeowner recently obtained what she assumed was her "credit score" through the QSpace Web site, and was disturbed that her score was much lower than the credit score she had heard about in a financing several years earlier.

The QSpace score is not a FICO score - a disclosure found only in the fine print on the Web site. It is instead a "generic" score that a QSpace spokeswoman said can only "emulate" a real FICO.

The bottom line: At least for the time being, there's only one source for the real thing - the FICO score your mortgage lender actually uses to evaluate you. Anything else may be interesting and even educational. But it may not be relevant in the real world of mortgage lending.

Kenneth R. Harney is a syndicated columnist. Send letters in care of the Washington Post Writers Group, 1150 15th St. NW, Washington D.C. 20071.