Even some of the most financially savvy consumers find credit scoring confusing — the numbers change all the time, there are dozens of scoring models, and you never know which score a lender will use when reviewing your credit application.
Yet of all the consumer scores out there, credit scores are the most widely known and understood. Reassuring, isn’t it?
Not to harp on depressing realities, but to most industries out there, you’re not a name, you’re a number. Unlike credit scores, a lot of these ratings systems are not accessible to you, and many aren’t subject to regulation. That brings up a slew of questions about privacy and the legality of using these scores in decision-making situations, a topic explored by the World Privacy Forum in an 80-page report on consumer scores called “The Scoring of America: How Secret Consumer Scores Threaten Your Privacy and Your Future.”
About 40 of those pages outline consumer scores that assess the meaning of hundreds of tendencies you may have, and you probably haven’t heard of most of the scores. Some fall under the Fair Credit Reporting Act, which allows consumers access to the reports scores are based on and gives them the right to correct inaccurate information. The Equal Credit Opportunity Act bars credit scoring companies from including race, sex, marital status, religion or national origin in credit scores. But that’s just it — ECOA is limited to credit scoring.
Except for those scores under Fair Credit Reporting Act, most consumer scores are not regulated for privacy or fairness. Here are a few of the most interesting, weirdest and surprising consumer scores out there.
1. Tenant Scores
When you fill out an application for an apartment, you often give the landlord permission to check your credit report. Understandably, the landlord wants to know if you have a history of making late payments, but there’s a lot of debate over whether it’s fair to use someone’s credit to approve or deny a lease, considering rent payments typically are not reported to credit bureaus.
Tenant scores fall under the Fair Credit Reporting Act, and they are based on information on your credit reports, as well as history of evictions and other data related to your renting history.
2. Health Scores
An individual’s health information is often subject to federal health privacy rules known as HIPAA (for Health Information Portability and Accountability Act). But plenty of health-related information falls outside those rules, like that held by fitness clubs, credit card companies, marketers of non-prescription health products, websites you frequent, massage therapists — it’s a long list.
“Health scores are now in full circulation with little consumer awareness,” the World Privacy Forum report says.
3. Frailty Scores
These scores are used for the elderly to predict health care costs and patient needs. They also estimate time of death.
“Research found that frailty scores could predict mortality within one year,” the report said. Is that more or less morbid than the watch that ticks down the seconds remaining of your life? I’m not sure.
4. Pregnancy Scores
In 2012, there was this well-publicized story of a father who found out his daughter was pregnant by way of Target’s marketing strategy. The retailer’s technology followed a pattern of the girl’s purchases that indicated she was pregnant and started tailoring marketing to her accordingly. Target was right.
This is an example of a custom score retailers can put together by combining their customer database with information from data brokers to learn more about the people who shop at their stores. What other custom scores are out there? Probably a lot.
5. Environmental Scores
How much of a tree-hugger are you? There’s a marketing score that determines how interested you would be in buying environmentally friendly products. The EPA also has a Human Toxicity Risk Score that can rate the air quality by neighborhood or square mile.
6. Churn Scores
We humans like to game the system — “Extreme Couponing” is a good example of this — and the system understandably wants to know more about the people doing it.
Churn scores gauge if and when you’re likely to switch your service providers, like your bank, cable company, phone service, etc. Any company with a history of consumer data can use it to build churn scores.
7. Community Scores
A score in the category with the boring name “Household Segmentation Scoring Systems” stands out for its bizarre way of classifying consumers. A product called PRIZM segments consumers into 66 categories with names like Blue Blood Estates, Young Digerati and Gray Power. These “communities” indicate shared demographics, lifestyle choices and spending habits.
There are other products like this out there, but PRIZM gets a nod for creativity.
These are only a few of the many consumer scores out there. There’s a score for predicting your job security, your likelihood of accepting offers you get in the mail, whether or not you’ll donate to charity — a credit score doesn’t seem all that confusing in comparison.
Credit scoring doesn’t have to be complicated, really. Yes, there are lots of scores, and you don’t have control over which scores your lenders look at, but there are a lot of things you can do to make sure you have the best credit score you possibly can. You can analyze your credit standing for free on Credit.com and make a plan for improving your credit.
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