Credit scores stand for crucial information about a person. It is the defining factor that helps lenders, financial institutions, creditors and banks to decide who are worthy of credit and who are not. However it is a fact that the main basis to which these three-digit number is extracted from is not pool-proof at all.

Credit records are always subjected to errors due to many factors like the very huge amount of information the credit reporting bureaus are handling, small errors in spelling or typographical errors or wrong information given by the lenders themselves can cause tremendous effects on one' credit report and score.

The fact that credit scores has a large possibility of being erroneous and the fact that it is an important digit-combination in a person's purchasing plans make things more complicated. Thus the use of it is heavily criticized by some people. In this article, some of those issues and controversies are presented.

FICO is the most widely used credit scoring system by several lenders. However, it is said that the problem with FICO score is the nature of their formula being too complicated. Moreover there is more than one formula for calculating FICO score and even using identical information about an applicant FICO scores generated can be completely different. And in cases like this a lending company will go with the lower score to represent the person's credit worthiness.

Another issue is revolving around the use of credit score for other decisions. Nowadays score sharing is normally done by different business units extending to those not directly related to credit-lending activities.

According to survey 90% of auto insurers and homeowner insurance use credit scores in determining the monthly charge for premiums or even to determine whether to do business with the applicant or not.

Credit scores are said to be developed to address the discrimination that may affect the credit industry. However, now that even a gasoline company would use a score to assess how much rate to give to the customer. Isn't this another type of discrimination?

As mentioned earlier, credit reports to which the score is based, are mostly containing errors. From here we expect credit scores to be cradling these errors as well. Some would say that there are errors that are inevitable but we must not be hopeless in seeking a score that would really reflect our credit credibility. There are ways that may help us minimize if not totally eradicate the flaws generated in our credit history unintentionally or intentionally.