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Credit scores: Flawed system...or Scapegoat?

I wrote a story recently in the print edition of BusinessWeek on a topic that I thought had been largely ignored in all of the coverage of the mortgage mess: The degree to which mortgage lenders, and the Wall Street firms that bundled mortgages into bond-like securities, replied on FICO and other credit scoring systems in their underwriting process. You can read the story by clicking here.

The story generated a fair bit of feedback from readers, as you’ll see in the comments at the bottom of the story. I was struck by the degree to which readers lambasted me and my partner in the project, Aaron Pressman, for blaming FICO and, with it, absolving the banks of any responsibility for making bad loans. That wasn’t my intent.