FICO and Equifax, friends again!! More details.

Yesterday Credit.com was among the first to break the news that Fair Isaac had dismissed Equifax from the Federal lawsuit filed against them, Experian, TransUnion and VantageScore Solutions.  And while the finer details are still becoming clear, here's what we know so far...

1.  The new ETA on FICO '08 being installed at Equifax and made available to their clients is "early 2009."  It won't be called FICO '08 when it goes live.  We believe the name will be similar to that of the classic FICO risk models currently available at Equifax, which is BEACON.  We are suggesting "BEACON '08."

2.  Equifax is still bullish on VantageScore and told Credit.com that there is "no change to our role in VantageScore. It's an excellent service that offers customers a credit risk score that is extremely predictive, and we are fully committed to its success."

3.  Credit.com has confirmed with Fair Isaac that the lawsuit is still moving forward against VantageScore Solutions, TransUnion and Experian.  This means that FICO did NOT drop Equifax because they suddenly felt that their case had less merit.

Here are some facts that can't be overlooked....

1.  The lawsuit was filed when Tom Grudnowski was still the CEO of Fair Isaac.  The new CEO, Mark Greene, is cut from an entirely different cloth.  I'll let you fill in the blanks.

2.  Equifax was the first credit bureau partner to offer a FICO score, back in 1989.  And while that has nothing to do with what happens in 2008, it's nice to see that high school sweethearts who had a bad break up are getting along again.

3.  Equifax is the only credit bureau that does NOT sell a fake or competing score to consumers via their consumer website, Equifax.com.  TransUnion and Experian still sell the PLUS, TransRisk and VantageScore scores via their numerous retail sites and via AnnualCreditReport.com.  Is it a coincidence that they are still defendants in the suit?  And was there an agreement that will open the door to Equifax selling non-FICO scores to consumers?  They've got one too...it's called GRAM (Generic Risk Assessment Model). 

4.  The lawsuit still has merit, so why abandon it against the other two CRAs and VantageScore Solutions?  Whether you like or dislike FICO, or the bureaus, if you read the lawsuit you have to agree that it makes sense.  Has anyone ever gotten Experian to answer the question "why do your credit scores have almost the same exact range as the FICO score?"  I know the answer, but can't get them to admit it.  Perhaps under oath they'll have to explain.

5.  FICO and the bureaus are taking some serious heat in the media for what's happening in the credit world right now.  BusinessWeek, who didn't let the truth get in the way of an entertaining article, ripped FICO's lungs out recently, and many other outlets (The NY Sun most recently) have chosen to forgo true investigative journalism and simply jumped on the bandwagon.  This allows FICO and Equifax to collectively circle the wagons and ride out the feeding frenzy.

We'll continue to follow this story and report on any new developments.

This is the equivalent of the O.J verdict for us credit junkies.  Big news!!

John Ulzheimer – Credit scoring and credit reporting expert, author and President of Credit.com Educational Services. Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on CreditBloggers.com.