Regulators Clear New Credit Score in Anti-Trust Probe
WASHINGTON – The U.S. Department of Justice announced yesterday it has closed without action its antitrust inquiry into the new credit score introduced by the three major credit bureaus. Equifax, Experian and TransUnion. The antitrust regulator began an informal probe after the three introduced the new system, called VantageScore, nine months ago, which will compete with Fair Isaac’s FICO score to help credit unions and banks determine the suitability of borrowers. Fair Isaac has filed a civil antitrust suit claiming the three credit bureaus are engaging in unfair and anti-competitive practices that harm the FICO score brand. The three bureaus, which dominate the U.S. market for credit reporting, currently sell and distribute FICO scores directly to lenders, which the lenders use to determine ability to repay all kinds of consumer loans. They also own the consumer data on which the scores are based. Fair Isaac said this will allow the three bureaus to unfairly manipulate the credit score price, sales and distribution in order to promote their new VantageScore at the expense of Fair Isaac or other credit score products.