- There is a need to be watchful of the three credit reporting agencies' (XP, TU, EF) half-truths and misinformation regarding products and services.
- To endorse such service, we’re unintentionally handing over our clients’ data on a silver platter to a credit reporting agency to share, sell to others and even compete with us.
- Serious and responsible homebuyers want to know their credit scores and examine their credit reports before completing mortgage applications.
Most real estate professionals want to be well-informed in all elements of the home purchasing process so they can do the best job serving potential homebuyers.
However, lack of interest and the baseless fear of liability in guiding their credit-challenged clients to useful tools and credible resources have given the sleazy credit repair industry a boost and indirectly supported the half-truths and misinformation provided by the three major credit reporting agencies (CRAs): Experian, Equifax and TransUnion). Let me explain:
These three CRAs with their countless affiliates continue to fool millions of consumers with their FAKO (not FICO) scores. Check that out here. Now, one of them is targeting the heart of the real estate industry with a new misleading service: Connect Credit Report and Score from Experian.
What is Experian Connect Credit Report and Score?
For 30 days, this service allows prospective renters or homebuyers to share a summary of their credit reports and scores and sends them directly from Experian to landlords, buyers, sellers and listing and selling agents. Your clients’ cost for the service is $14.95.
What brand of score is used with this service?
The service uses VantageScore, which might work for landlords but can’t be counted on by potential homebuyers when applying for a mortgage. Mortgage lenders do not use this score when underwriting their loans.
Furthermore, Experian’s terms and conditions for this service plainly disclose that the score may or may not be used by lenders, and it cannot endorse or guarantee the score’s worthiness as seen by lenders. In other words, it’s a throwaway score that can’t be relied on or trusted.
What does Experian get with this service?
The service reserves the right to maintain, share, exchange and sell your clients’ non-public personal information (NPPI) indefinitely. Your clients’ inboxes and mailboxes will be flooded with offers from other real estate brokers, lenders, furniture stores, home improvement companies and many other providers of real estate-related services.
For a fee, your clients’ NPPI is available to anyone and everyone. People can opt-out, of course, if they can find the link to do so. (Good luck!)
I first learned about this service two years ago after visiting the home page of Pismo Coast Association of Realtors (PCAOR) in California. It was a simple ad then; now, Experian has secured a permanent platform on the association’s website. It’s suggested that PCAOR members recommend the service to their clients — encouraging them to purchase it directly from Experian.
I contacted the association to find out why Experian was given this extraordinary visibility on its website. The written response I received clearly displayed a lack of knowledge of the true value (or lack thereof) of the service.
True and caring real estate and lending professionals should not stop talking about the need of good information. It’s important for National Association of Realtors leadership and other leading real estate associations to use their powerful strings and demand a clear and truthful information from Consumer Data Industry Association members, including Experian, Equifax and TransUnion.
Real estate associations must provide credible tools and resources to their members and those members’ clients. Serious and responsible homebuyers will want to know their credit scores and examine their credit reports before completing mortgage applications, but purchasing this Experian service will give those false scores and possibly increase the risk of identity theft when their personal information is shared with others.
Here’s a safe and simple alternative: for just $5 more, your clients can get a detailed credit report based on Experian data with real FICO scores lenders actually use from myfico.com.
Nabil Captan is the founder and CEO of Captan and Company. You can follow him on Twitter @nabilcaptan or on LinkedIn.
