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Posted by Elle on February 12, 2008, 10:55 am
> I think the sex of the individual has something to do with
> the score.
By federal law, lenders may not use race, gender,
nationality, or marital status (more) in determining credit
score yada. Hence FICO does not consider these. Google
{"Equal Credit Opportunity Act"} for details.
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Posted by Daniel T. on February 12, 2008, 6:58 pm
> > I think the sex of the individual has something to do with
> > the score.
>
> By federal law, lenders may not use race, gender,
> nationality, or marital status (more) in determining credit
> score yada.
AFAIK,the formula used to determine the score is secret. E.i., not
subject to public or government scrutiny, so I don't see how that is
relevant.
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Posted by Elle on February 12, 2008, 7:20 pm
Regarding the illegality of using race, gender, etc. in FICO
scores and when the typical bank determines loan
eligibility:
> AFAIK,the formula used to determine the score is secret.
> E.i., not
> subject to public or government scrutiny, so I don't see
> how that is
> relevant.
The FICO formula is subject to government scrutiny. No
company operating in the U.S. can legally avoid this law.
Considering the many cases concerning race discrimination
and lending practices, it should be obvious that FICO would
not risk its reputation through supporting illegal lending
practices.
If you want to argue that there are cultural factors that
result in women being better risks (once all the data is
plugged into the FICO formula), then I think it is possible
that these factors are identifiable, but in a
non-discriminatory way, and end up transmitting through the
FICO formula.
Unless you wish to argue that it is discrimination against
men to count, as a part of the FICO score, paying bills on
time and having large credit card balances.
Women still pay lower auto insurance rates, and it's because
they have fewer auto accidents, which could even be said to
be an indication of the risk-aversion of women.
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Posted by Daniel T. on February 12, 2008, 7:45 pm
> Regarding the illegality of using race, gender, etc. in FICO scores
> and when the typical bank determines loan eligibility:
>
> > AFAIK,the formula used to determine the score is secret. E.i.,
> > not subject to public or government scrutiny, so I don't see how
> > that is relevant.
>
> The FICO formula is subject to government scrutiny.
I did not know that. So they do disclose the formula? Where might I see
it?
> If you want to argue that there are cultural factors that result in women
> being better risks (once all the data is plugged into the FICO formula), then
> I think it is possible that these factors are identifiable, but in a
> non-discriminatory way, and end up transmitting through the FICO formula.
I'm not arguing anything. There may be cultural factors that result in
women having higher scores. I wouldn't know though because I don't know
what is entailed in determining those scores.
All I have stated to date is that in my experience wives (not women in
general) have higher scores than their husbands, and after years in car
sales, I saw a lot of credit scores.
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Posted by joetaxpayer on February 12, 2008, 8:55 pm
Daniel T. wrote:
> I'm not arguing anything. There may be cultural factors that result in
> women having higher scores. I wouldn't know though because I don't know
> what is entailed in determining those scores.
FICO states the score is based on:
35% payment history
30% amounts owed
15% length of credit history
10% new credit
10% types of credit used
> All I have stated to date is that in my experience wives (not women in
> general) have higher scores than their husbands, and after years in car
> sales, I saw a lot of credit scores.
You stated "I think the sex of the individual has something to do with
the score." And I think you and Elle are both right. I think they tend
toward more prudent behavior and as Elle said, risk-aversion. This leads
to the correlation of higher scores. Gender wasn't a variable in FICO's
scoring, nor is income, for that matter, but I'd presume the wealthy
tend toward better FICOs than do the poor.
JOE
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