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The Risks Of Identity Fraud With FICO Credit Scores

By Sally Maison
Published: Thursday, February 11th, 2010

The threat of identity theft nowadays is quite considerable and consumers are well aware of it. What is even more worrisome is that a few of the most exposed identity theft avenues are connected to the finances of consumers such as credit cards, online bank information and now, FICO scores.

The Risks Of Identity Fraud With FICO Credit ScoresRecently, a consumer received a letter from myFICO regarding a case of identity fraud. MyFICO is a division of FICO, the company that generates the well known and widely used FICO credit scores. The letter informed the consumer that his FICO score had been bought from FICO through the internet by an impostor.

Understandably, the experience was quite shocking for the consumer. Identity theft is a serious problem for American consumers. A case of identity theft can be quite costly in terms of both time and money. There is also a high risk of permanent damage to a person’s finances and even personal safety. It is therefore very scary for consumers to learn that their personal financial information can be accessed by someone else other than themselves. It is even more disturbing to know that the information that was stolen came from the top credit score generating company in the country.

As Craig Watts, spokesman for FICO puts it, their website, myFICO.com, does get visits from identity thieves. However, he says that they have security safeguards in place which are designed to secure the information of their members. If there is any reason for them to suspect that someone is trying to steal or use the identity of one of their members, they will immediately alert him or her as a matter of policy.

The notification for identity fraud that the consumer received is part of a standard policy of FICO. According to Watts, FICO will immediately notify a consumer even if there is just a suspicion of an identity theft problem. He says that the company tends to lean towards an “over-alert” rather than “under-alert” stance regarding informing their members of possible identity theft threats. The company, Watts explains, would much rather be safe, although a bit rattled, than sorry when it comes to the risk of identity theft.

A case of identity theft in FICO also does not pose a huge information leak risk for consumers. Watts says that FICO itself is not a large data center holding a considerable store of information regarding consumer banking, credit card and other financial information. The company only applies its own mathematical formula to calculate FICO scores using credit reports generated by other companies which it then resells to consumers after they have been processed by the different credit bureaus.

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