3 Reasons Why FICO 08 Will Not Happen

By Ted J Stearns

With all the hubbub surrounding FICO 08, we thought we owed it to our readers to separate the truth from the myth. This is Fair Isaac's "answer" to the problem of authorized users and other complications with the credit score world. It is a software program to be used by all three credit bureaus to weed out authorized users and prevent their scores from being accepted by lenders as "legitimate." It also aims to do much more that could put millions of credit card users in financial jeopardy. Fair Isaac, who incidentally own Experian, said that Experian would begin implementing the new software in September with the other two agencies to follow sometime next year. Well, September has come and gone and no changes have been made. Apparently it has been easier for critics to confuse the public, than to actually implement the software.

Even amid all the controversy surrounding the purchase of trade lines, experts in the business have good reason to believe itwill never happen. Here are three legitimate reasons why FICO 08 won't happen:

1. It is not in the interest of any of the three credit agencies to promote or support the use of FICO 08.
If it is implemented, the agencies would report the exact same credit score for each individual. Presently, each agency comes up with the score through different means; Experian uses 'Fair Isaac Version2, TransUnion uses Emperica 95 and Equifax uses Beacon 5.0, providing three different scores from which lenders take the middle. If FICO 08 is used, all three agencies will come up with the same score. This would ultimately negate the need for three agencies, when one would be sufficient.

Craig Watts, a spokesman for Fair Isaac said regarding the proposed release of FICO 08, "Adopting the FICO blueprint to get the maximum benefit for each repository is difficult because each uses unique data. When we update the FICO score we need to do that individually with each credit reporting agency." Implementing this new software is apparently much more complicated, which may explain why no one has yet begun using it.

2. It would be detrimental to the millions of families facing foreclosure.
With the real estate market taking a dive and countless people facing foreclosure (due mainly to lenders and their "creative loan option"), to prevent these same Americans from boosting their credit score through trade lines in order to refinance and get a loan they can afford, would send countless families into foreclosure and our economy spinning out of control. Experts know that lenders and Wall Street banks have attempted to push this program forward as they have the most to lose by people purchasing trade lines and refinancing into affordable loans that they can pay. A loan at a lower rate means hundreds of dollars in the borrowers pockets every month and not the banks'. Even Presidential candidates have remarked that Wall St. banks have stepped up lobbying over the issue of sub-prime lending as underwriting practices have come under scrutiny. They don't want legislation that would ultimately protect the consumer despite recent moves to do so. This is why FICO 08 is their only hope, to continue to line their pockets at the expense of homeowners and to avoid greater speculation regarding their abusive lending practices.

3. FICO 08 could bring legal action against Fair Isaac.
Another aspect of FICO 08 is to redistribute credit users into 12 new categories effecting millions of people, many negatively. With the new categories, everyone will shift somewhat and even a slight change downward could mean the difference between a great and a poor credit score. This shift could ultimately cost a consumer hundreds of dollars a month on a mortgage. Experts say that women are more likely to be ill effected as they are often "authorized users" on their husband's credit cards. The shift would bring down the average score of a couple seeking a loan, hurting their chances of qualifying for one they can afford. All that said, legal experts predict a civil action lawsuit on the horizon for Fair Isaac. Not ignorant of this possibility, it is unlikely that they would be willing to risk great financial risk and negative press over a software program, especially if it fails to benefit all three credit bureaus.

In addition to these reasons, the fact that none of the credit agencies have yet to implement the system, leads market experts to agree that it simply may not happen. Despite what the critics have to say about the acceptance of trade lines and Fair Isaac's full-fledged marketing campaign to confuse and mislead the public to think the loophole has closed, the remains open. So where does that leave us as a business restoring hope to financially troubled families? Where does this leave you as a consumer trying to keep your home? Trade lines are still the best and fastest method to boost your credit score in 30-45 days, refinance, keep your home and experience financial stability.

Ted Stearns, owner of TradeLine Solutions, a San Diego based credit aide company, is not a newcomer to the world of finance. His experience began as an options and futures broker with Currency Trading International about 12 years ago. Since then he has been a financial advisor who hosted a live radio show on AM 1000 KCEO for four years, educating callers and listeners on stocks, bonds and various investments. Over the last five years he has delved into the nationwide mortgage business informing both clients and lenders alike in the arena of purchasing and refinancing.

With all former experience as his guide, he has come into the world of trade lines to help clients better their financial situation. Able to glean from the perspective of both lender and client, he has the unique ability to see the need of the purchaser and meet it head on.