Bankers should know about a Web site called www.myfico.com. The site is operated by Fair Isaac, the big credit scoring firm. Anyone can log on, enter some personal information, and obtain a credit score for $12.95. I tried it, and was given something called a"BEACON" score, along with reasons my score wasn't better. The report told me that about a third of American consumers have a better credit score than I do. But it also said the odds of me successfully repaying all credit accounts is 2.32 times better than for people with an average score. It said my credit score was about the same as that of 29 percent of American consumers, and that only 2 percent of people with my score have delinquent credit accounts.

Bankers should know about this site for several reasons. First, your customers are using this site. Consumers are more likely than ever to enter a bank armed with information about their own creditworthiness. This is the same information that you have access to. This universal access to credit information balances the playing field in the loan negotiation process. It gives consumers the same kind of leverage they gain when they know the Blue Book value of the car they want to buy before walking into an auto dealership.

Second, a banker may want to encourage a loan applicant to use this site. If the banker suspects a potential customer has credit problems, the banker can suggest the customer check out this Web site first. That way, if there is bad news to deliver about the person's creditworthiness, the impersonal Web site can do it instead of the banker.

Third, the site is educational. The best defense bankers have against accusations of unfair lending practices is an educated consumer base. The more consumers understand about the credit allocation process, personal finance and money management, the better customers they will be. The report I obtained gave me concrete suggestions for improving my credit rating. Many people who may not want to discuss their credit situation with a banker, may be willing to listen to a computer that offers practical advice.

Finally, this site is one of the banking industry's best defenses against legislation addressing predatory lending. Almost every level of government - from city council to the U.S. Congress - is considering some form of predatory lending legislation. Most of the rules under consideration will do more to cut off credit than they will to protect consumers. Bankers can work to prevent the passage of such measures by pointing out that the credit allocation process, which may have seemed secretive in the past, is growing more open and objective all the time. Web sites such as myfico.com prove it.

Copyright NFR Communications Inc Jun 15, 2001
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