Want HBO? Better Check Your Credit

If you've got plans to order the March Madness cable TV package, you'd better make sure your credit score is up to snuff.

This week credit reporting company TransUnion announced that it is rolling out a customized credit scoring model for the broadband/cable industry. These service providers join credit card companies, lenders, landlords, insurers, employers, and utility companies in having an industry-specific risk formula to run consumer background checks.

What does that mean for the upcoming football season or next year's all-access college hoops pass? You might end up staring at a blank screen during the Final Four, or at least shelling out more than the guy down the hall for the same cable TV service.

No, it's not because of that time you helped a friend steal cable from the dorm room next door. It's because of that credit card payment you made three months late.

Score surfing
A credit score is simply a best guess as to how likely it is that a customer will pay his or her obligations on time. It's based on your past behavior -- how long you've managed credit, how much of it you have, how much you are using, what kinds you have, and how you've handled the whole shebang.

The catch is that we don't have just one credit score -- or even three, for that matter. In fact, there are hundreds (maybe even thousands) of ways credit reporting bureaus size up individual consumers each day. And did you know that there are more than 1,000 credit reporting agencies?

Only about 10% of the business the major reporting bureaus do is direct to consumers. For publicly held Equifax (NYSE: EFX  ) , for example, just $29 million of its $375 million third-quarter revenue was attributed to "Personal Solutions."

Each industry that relies on credit reporting agencies has its own credit scoring model based on metrics specifically designed to help it manage risk and identify new customers. (Many companies commission custom scoring models to further hone the formula.) TransUnion, for example, offers analysis for 11 industries (from automotive to energy to investment to telecommunications). It says its new broadband/cable scoring model incorporates more than 25 consumer characteristics and information from the largest cable providers across the country.

So is your credit score a lie (as I've suggested in the past)? Not exactly. Just consider it your reality, and understand that now your cable company is doing business with you based on its reality of you.

You can't "pause" past credit blunders
Your cable provider's reality centers around the likelihood that you'll be 90 days or more past due over a 12-month period. (Here's more about the real impact of late payments on your overall credit score -- it's not as bad as you think.) According to the TransUnion press release, its new broadband/cable scoring model is 6% to 17% more accurate at predicting customer bill paying behavior for that industry than it was when using wireless phone risk models and generic credit scores for the same purpose.

Since the old measures the industry used might have missed a few things, you may want to closely scan your next cable bill.

If you've been a credit Goody Two-shoes, you'll probably get more fliers in your mailbox trying to upsell you a few movie packages. If you've been bad about your bills -- any bills -- in the past, you might want to start making friends with some folks who have cable so you have a fallback for the big game.

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