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Consumers for years have tangled with the three major U.S. credit bureaus because of inconsistent or sometimes inaccurate data. A fourth company actually introduced a credit scoring system using data from the information companies to attempt to predict the creditworthiness of a loan or other obligation.

Now the credit bureaus - Equifax, Experian and Trans Union - are fighting back. They have introduced a new scoring system that makes use of a different scale. The industry standard, known as a FICO score since it was created by Fair, Isaac Corporation, used an 850 point scale. The new program, called VantageScore, uses a 990 point scale.

“The truth is that there were always inconsistencies between the different bureaus’ reports,” said Consumer Help Web President Joan Bounacos. “We simply wish they had entered into an agreement with Fair, Isaac so that consumers were not confused by knowing whether a particular number was good or bad.”

Consumers are entitled to receive a free credit report each year, and some industry experts have expressed concern that the VantageScore, which can be sold, is an attempt to generate more consumer revenue. “We know that they have to make the data available,” Bounacos said. “But now they can simply say that that they have complied by supplying the raw data.”

Fair, Isaac had previously released proportional information that told consumers how their actions could impact their credit score. VantageScore, which is a separate commercial entity owned jointly by the credit bureaus, has released more information, but consumer advocates say the data is harder for consumers to understand and may lead to differing conclusions.

“No one is going to share their secret formula, nor should they,” Bounacos said. “But to help consumers improve their credit, VantageScore should release at least the proportion of different actions that go into computing the score. Nothing will be gained by hiding this information from consumers.”

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The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. The Federal Trade Commission (FTC), the nation’s consumer protection agency, has prepared a brochure, Your Access to Free Credit Reports, explaining your rights under the FCRA and how to order a free annual credit report.

A credit report includes information on where you live, how you pay your bills, and whether you’ve been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

How do I order my free report?

You can order your free annual credit report online at annualcreditreport.com, by calling 1-877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

When you order, you need to provide your name, address, Social Security number, and date of birth. To verify your identity, you may need to provide some information that only you would know, like the amount of your monthly mortgage payment.

A Warning About “Imposter” Sites

The FTC advises consumers who order their free annual credit reports online to be sure to correctly spell annualcreditreport.com, or link to it from the FTC’s website to avoid being misdirected to other websites that offer supposedly free reports,but only with the purchase of other products. While consumers may be offered additional products or services while on the authorized website, they are not required to make a purchase to receive their free annual credit reports.

Posted under Finance