FICO score is a critical component of access to goods and services that affect every domain of our lives. However, to most Americans it is a dreaded three digit number that is recited when credit is denied.
The score is used for risk-based lending that allows banks, insurance companies and service providers to charge higher rates and provides the ground for predatory lending. Minorities are disproportionately hurt by this score.
The FICO score comes out of a black-box and provides no disclosure on how the score is actually computed.
During this recession, most Americans have taken a hit on their score. The FICO score needs to be reformed to reflect the economic reality in light of fairness and equity.
We need ful disclosure and transparency.