One minute they're stonewalling, the next minute they're begging you to listen. I'm speaking of the companies that create consumer credit scores.
Right now, you probably don't know your personal credit score, and the industry hasn't wanted to tell you.
Within a year, however, they'll be falling all over themselves to disclose. The knowledge should help you handle your money a little better.
A credit score tells you how you stack up as a borrower, compared with the rest of the population. The more traits you share with people who pay their bills on time, the higher your rate.
The most widely used scores are based entirely on the information in your credit report, such as whether you've ever paid bills late. Generally speaking, 720 is a high score, 585 a low one.
When you apply for a credit card, mortgage or other loan, lenders check your credit history and your score. They may also add other data, such as the size of your income. If you score high, you'll get the loan on the best terms. Middle-range scorers get loans, but perhaps at a higher interest rate. Low scorers will find it difficult to get any credit at all. Every lender sets its own cutoff points.
The leading creator of scoring systems is Fair, Isaac, in San Rafael, Calif. Just a month ago, Fair, Isaac's Craig Watts explained to me, carefully, why it would damage the American way of credit to let people learn about their scores.
In fact, Fair, Isaac and the credit bureaus have generally prohibited the lenders from disclosing specific scores.
Well, Fair, Isaac has changed its mind.
Last month, Trans Union, a credit bureau that sells a competing scoring system, announced that it plans to create and disclose individual credit scores. The scores should be available before the end of the year, to people who order credit reports.
Another credit bureau, Experian, is looking at this question, too.
Fair, Isaac jumped on the bandwagon. Watts says his company acted because disclosure legislation has been proposed in California and in Congress. But perhaps a bigger reason is the competition. "We'd better step in to provide an alternative source of information," he says.
Already, Fair, Isaac has posted a general explanation of what's in your credit score (see its Web site, www.fairisaac.com).
