Credit Repair Services and Information
Credit Scoring Systems
What is a Credit Score
About credit scoring systems
Credit details used in credit scoring models
Improving credit scores
Credit Scoring Systems
A credit scoring system cannot use certain personal
characteristics, as defined by the Equal Credit Opportunity Act. These include an individual's race, religion, sex, origin or marital status. If
a scoring system uses age as a characteristic, it is obligated to give elderly
persons equal treatment.
Different credit scoring
models can be used depending on the type of credit being applied for. As well,
many generic forms of scoring systems have been developed by third parties. In
all of the systems, characteristics are identified for either random samples
or samples with similar financial histories. Each of these characteristics is given
a score, based on it's perceived ability to determine credit risk. The characteristics
are then statistically analyzed to determine creditworthiness.
There is no one, single credit scoring model used by all
creditors. They differ in terms of the model itself and the characteristics used,
and they can differ depending on what type of credit is being sought. Generally
speaking, changes in one factor used by the model affects other factors within
the model. Discuss the model being used by the creditor in question to determine
what factors are most important in determining your credit score.
Every Credit Reporting
Agency calculates a credit score based on the information in a consumer's credit
report. Fair Isaac Corporation uses their own system to calculate a Fico
score based on the data provided to them by the 3 major Credit Reporting Agencies.
Ask your creditor what credit score they are using to assess your creditworthiness.
Regardless of what credit scoring system
is being used to determine your credit worthiness, remember that certain factors,
including timely bill payments, steady employment, and past credit repayment
will always help raise a credit score. Any credit scoring model that isn't accessing
up to date, accurate information about you cannot possibly reflect a credit
score in the best possible light. Credit repair services can help remove inaccuracies
from your credit report, helping you score higher on any credit scoring
system.
The Consumer Federation of America offers information and
articles about credit scores. Read through the FTC's information about credit scoring.
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