MORE BOGUS CREDIT RATINGS

There were serious problems with how the major credit rating firms dealt with CDOs, SIVs and other assorted crap based on mortgages. The bubble they helped create also affected personal credit scores:

Straight Talk on the Mortgage Mess from an Insider
12:11:23 PM December 6th, 2007
Herb Greenberg
MarketWatch

But we have learned over the past year that credit scores are not a good predictor of future ability to repay. This is because over the past five years you could refi your way into a great score. Every time you were going broke and did not have money to pay bills, you pulled cash out of your home by refinancing your first mortgage or upping your second. You pay all your bills, buy some new clothes, take a vacation and your score goes up!