You make $67,000 a year, have a $250,000 mortgage, an additional $10,000 in credit card debt and a credit score of 681. And according to

Fair Isaac


, the company whose proprietary credit-score system lenders use to determine creditworthiness, buying a Porsche is a bad financial move.

Sorry. Have you considered a Toyota Corolla?

In five years, if Steven Sjoblad's grand vision comes true, Fair Isaac will do more than just provide the FICO credit score that lenders use to make billions of loan decisions each year. Sjoblad, the company's vice president of global consumer services, sees Fair Isaac becoming a one-stop shopping center for all aspects of consumer credit -- from how to improve a credit score to how to properly use credit.

"I see us offering an online service that helps people make important decisions in their lives," he said. "Say you're thinking about buying a new car. Based on what we know about you, these are the kinds of car models that are important. These are the ways you can buy them. And if you'd like to do a test drive, we can arrange for one to be driven to your office at your lunch hour."

A Complete 180

This vision of the future is quite a departure from Fair Isaac's past.

For more than 40 years, the company refused to let consumers know what their FICO score was, let alone how it should influence the purchase of a new car. It fought disclosing information about FICO scores on grounds that consumers would know too much about how they're computed and would be able to artificially manipulate them. Ever since the company first began computing FICO scores in the 1950s, this policy remained constant -- don't ask, because we won't tell.

"Getting information out of Fort Knox was easier than getting it out of Fair Isaac," said Howard Dvorkin, president of Consolidated Credit Counseling Services, a nonprofit credit counseling service. "Now they're much warmer and friendlier."

Indeed, over the past 15 months, Fair Isaac not only began selling FICO scores to customers, it has provided them with an unprecedented amount of information about credit scoring. Now, consumers are allowed to know exactly how credit scores influence loan rates and even what steps they can take to improve their scores -- something Fair Isaac once said would lead to manipulation.

"Obviously we're not going to launch a product that's going to undermine the rest of the business," said Sue Simon, vice president of, Fair Isaac's consumer Web site. "But we've done a lot of stress testing using our analysis to convince ourselves that the score can't be gamed."

And so, in March 2001, the company launched a product called Score Power, in conjunction with credit bureau Equifax, which provides consumers with their FICO credit score and a copy of their credit report for $12.95 per report or $38.95 for an annual subscription. This past May, the company added a feature called Score Simulator to Score Power, which allows consumers to see how their actions would directly affect their score.

"Rather than just giving them static information that shows where their score is right now," said Simon, "they can do some simulations to show what would happen to their score if, say, they started paying their bills on time."

More changes are in the works. By the end of the summer, Fair Isaac plans to launch a variation on the Score Power product that allows consumers to see their FICO score and credit report from all three credit bureaus -- Experian, Equifax and TransUnion. "We're putting finishing touches on the design and we're about to nail down our price point, which will be competitive," Simon said, adding that similar products can cost up to $50.

Also this summer, Simon said Fair Isaac plans to offer a credit monitoring service that would alert consumers when changes are made to their credit reports at all three agencies.

Ultimately, Fair Isaac's plan is to treat credit the same way millions treat their assets -- by organizing accounts into an easy-to-read portfolio. "It will include information about how your credit score is tracking over time and will allow them to do some benchmarking, to say if I'm at this stage in my financial life with these kinds of goals, what are the ways I can use credit," Simon said.

If You Can't Beat 'Em ...

"I've watched this transformation with some amazement," said Beth Givens, director of the Privacy Rights Clearinghouse, a nonprofit consumer advocacy site. "They used the argument for years -- that consumers should not know their score and what comprises it because they could learn how to improve it by tricking their algorithm. But look where they are today."

Givens credits


, an online mortgage lender, with forcing Fair Isaac to change its ways. In February 2000, the lender broke Fair Isaac's long-standing mandate to keep credit scores confidential and began providing them to potential customers for free. In reaction, Fair Isaac threatened to cut off the company's supply of credit scores, but the genie was already out of the bottle.

Three months later, the California state legislature overwhelmingly passed a bill that would force Fair Isaac to provide credit scores to consumers who requested them. At the same time, Congress began considering an amendment to the Fair Credit Reporting Act that would do the same thing.

"The inevitability of this information getting into consumers' hands because of legislation was very apparent," Sjoblad said. "We wanted to take a leadership role and do the right thing."

The company also saw a lucrative revenue stream, or as Sjoblad said, "With 180 to 190 million credit records out there, we don't need to be relevant to a huge percentage of them to create a very nice business."

The Bottom Line

While Fair Isaac will profit off of these forthcoming initiatives, consumers also win, empowered with the knowledge of how to raise their scores and save thousands of dollars in loan costs. On a $100,000 30-year fixed rate mortgage, the borrower with a credit score of 720 would save more than $70,000 over someone with a score of 600 over the life of the loan.

And with identity theft on the rise -- the Federal Trade Commission estimates that 1.5 million cases will occur in 2005, more than double last year's total -- increased access to credit scores and reports will help consumers prevent fraud.

"It took a long time for consumers to even realize they had a score, let alone how it was compiled or that it was being sold to lenders," said Slyvine Marabotto, program director for the Consumer Credit Counseling Service of New Jersey. "But knowledge is power. And anything that increases disclosure for consumers is a good thing,"