Credit scores, which help determine one’s mortgage, is controlled by an exclusive club, but, back in July, Federal Housing Finance Agency leader Bill Pulte decided the FICO score would get competition in the home-loan market, Victor Swezey of Bloomberg reports. Fannie Mae (FNMA) and Freddie Mac (FMCC) would begin backing loan scores by VantageScore Solutions, a FICO alternative. In the current system, Equifax (EFX), Experian (EXPGY) and TransUnion (TRU) collect financial and personal data to create consumer-credit files which is used by Fair Isaac Corp.’s (FICO) algorithm to create a standardized FICO score. VantageScore is owned by the three big credit-reporting companies and is looking to cut FICO from the equation. This has set off a credit-score war and may result in rising credit-score prices for consumers.
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