Back when father was a lad, there was no such thing as a credit score. If you applied for a mortgage loan, you filled out the application showing income, assets, employer, the value of the house, and that was pretty much it.

Mortgages, like applications, were simple. Somehow, loan officers did their jobs, there were very few foreclosures, and very few banks went bust.

Then the wise guys started inventing really complicated mortgages, and something called FICO scores got into the act. FICO stands for the Fair Isaac Corporation, and they pretty much own the credit score business. As mortgage products got really byzantine, the people in the financial industry needed a single national standard, so that they could slice, dice, buy and sell mortgages, as well as derivatives based on mortgages. A FICO score became obligatory.

But somehow, the good people at Fair Isaac missed the subprime scam. People were approved for mortgages that they didn’t understand, with exploding interest rates. Credit scores either got fiddled or got waived. The whole industry got rich—until the collapse. A few fines were levied, but Fair Isaac escaped unscathed.

Now, as incomes lag the cost of living, the financial industry has come up with new ways to encumber consumers with debt. And Fair Isaac has just announced that its new credit-scoring system will start punishing consumers who are stuck with increased debt loads, by reducing their credit ratings.

Kind of like shooting the wounded. And hey, Fair Isaac makes money either way.

Credit scores are another of those bells and whistles that add nothing to economic efficiency but are simply a product of the financial complexity that benefits insiders—and then add to the complexity and cost. Doesn’t exactly seem Fair.