Given the current state of the economy and banking, I have to believe that point scoring doesn't work.

This mess began as 'sub-prime' mortgages began to go south about 2006. Then the definition of "sub-prime" was either 100% (or more which means zero down) or those with bad credit and or recent bankruptcies. And there was an absence of income verification, to boot.

The leading point scoring company was overly generous in awarding poits if the derog was more than two years in the past.

At first, only Wall Street investors, those investment firms like Lehmann Bros, Merril Lynch etc., who purchased billions in sub-prime using pension fund, were affected.

Then it became known that a few large banks, Citi, Wachovia, WaMu, had also purchased large portfolios and needed bailout money.

As losses began to mount, credit tightened up across the board, including 'business or commercial' credit. Foreclosures increased the housing supply, and real estate values dropped even further, which causes even more foreclosures, because mortgage balances exceed values.

Now we see credit lines being reduced, closed, or rates increased. Next we might see annual fees imposed.

The leading scoring company has changed its formula twice in the last 2 years.

Somehow I don't think it ever really worked. It was designed for simple, low balance (exposure), in and out, lines of credit called "credit cards". Unsecured, short term lines of credit.

The mortgage investors used it for "High balance, long term, secured credit".

Two entirely different loan products.


Just my opinion.