Six weeks after a GartnerGroup Inc. study concluded that frequent online shopping for lending products can harm a consumer's credit rating, credit bureaus and Fair, Isaac & Co. - which produces a majority of the credit scores banks use to approve applications - say they are not changing their evaluation methods.
The study said those who browse the Internet for more than a month for the best rates - on mortgages, auto loans, credit cards, and the like - unwittingly undercut their credit scores and their chances of getting the best terms.
These scores drop, the study concluded, because a credit report is pulled each time people give out their Social Security number. Whenever these reports are pulled, it appears to lenders that the consumer is applying for a lot of credit and possibly overextended.
But the bureaus and Fair, Isaac say they are not convinced this is a big problem.
"Until we have data in hand that demonstrates that this is happening, Fair, Isaac is not changing its score," said Craig Watts, manager of consumer affairs at the San Rafael, Calif., company.
Officials at two of the big three credit bureaus said the GartnerGroup findings are not prompting their companies to revise their scoring procedures. Furthermore, these executives maintain that credit checks or "inquiries" - when a lender looks at a credit report - are far less important in determining a credit score than factors such as a consumer's payment history, or debt load.
Nevertheless, the study has captured a lot of media attention full of warnings that credit shoppers should be careful about using the Web.
The credit bureaus and Fair, Isaac concur that online shopping theoretically can damage consumers' credit scores, but they say they see no evidence that backs this supposition. Mr. Watts called the GartnerGroup findings "conjecture" and "anecdotal." After the study came out, he said, Fair, Isaac asked its largest lending customers whether Fico scores are still effective in evaluating consumers' creditworthiness, and they said they are.
"As long as our customers are telling us that our scoring models are performing as well as they did in the past, then there is not much reason to investigate or change," Mr. Watts said.
Fair, Isaac will continue to rely on the data it receives from lenders to evaluate its scoring product's effectiveness, he said.
Maxine Sweet, a spokeswoman for Experian Inc., a credit bureau and consumer information company, said that "there hasn't been enough history of online shopping to change the model" and that not enough consumers are doing extensive comparison-shopping online to affect "the predictiveness of our data."
Experian, of Orange, Calif., is looking into consumers' online shopping behavior, but Ms. Sweet said it will be some time before a new scoring model emerges. Mr. Watts said it typically takes two years to build a predictive model from such research.
In the meantime, Rasha Elass, an analyst with GartnerGroup's e-Business Services in Stamford, Conn., and the study's author, said consumers are at risk.
"I guess everyone is doing their own research on the subject," she said. Ms. Elass maintains that online rate shoppers take their time - some may see it as an enjoyable pastime akin to window-shopping and may not realize the possible consequences. The scoring models generally allow 14 to 30 consecutive shopping days before inquiries start to count against consumers.
Ms. Elass said her own Web shopping for a mortgage led to her research. An article in the April 26 Washington Post about her included tips from Fair, Isaac on how to avoid credit-score problems: Pay bills on time, keep balances low, apply for new credit accounts only as needed, and periodically check the accuracy of credit reports.
Robert Hogan, a senior vice president of the Equifax Inc. credit bureau and consumer data company, suggested that - contrary to Ms. Elass' contention - the Web is helping loan shoppers make faster decisions.
"It's possible that the Internet is not expanding the time used to shop for credit, but contracting it," he said. "They could be shopping in one day."
