July 31, 2008
by Edward Jamison, Esq.
If you've been following the financial news over the past couple of weeks, chances are you've heard about the CompuCredit lawsuit and the potential impact on credit scores.
On June 10th, the Federal Trade Commission filed a lawsuit against CompuCredit, for the deceptive marketing of their Aspire Visa card to sub-prime borrowers. According to the lawsuit disclosures, CompuCredit was penalizing their customers for using their Aspire Visa cards with certain merchants.
A few examples that were given were massage parlors, bars, tire companies and even marriage counselors.
They were using a scoring model that helped to predict their customers' risk based on where they shopped. How in the world does buying tires or going to marriage counseling impact credit scores?
You can imagine the frenzy this piece of information is causing. Furious consumers and media outlets were demanding to know why "where" you shopped could negatively impact your FICO scores. Well, therein lies the problem... unfortunately, the media lumped these scores with FICO scores and simply put - these aren't FICO scores, folks.
This caused an awful lot of confusion and in an effort to set the record straight, here's some additional context that should help shed some light on this touchy subject:
Click Here to Read On...
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