Joe Nocera’s Terrific Report on the Tyranny of Credit Scores

NY Time’ columinist Joe Nocera’s report on the tyranny of credit scores is right on the money. He points out that Fannie, Freddie and the banks that write mortgages depending on one thing–the applicant’s credit score. Nocera gives examples of perfectly credit-worthy consumes whose credit scores are low for odd and irrelevant reasons. For example, a consumer’s “credit utilization may be high on only one credit card. Using FICO’s formula, this adversely affects the credit score. But Nocera notes that it is not FICO that comes up with a borrower’s score — it just sells the algorithms. The three national...

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