What Is Credit Scoring

Through credit scoring, lenders try to push personal judgment away from credit evaluation. Credit scoring data from auto loans, department store accounts, and credit cards prove that computer statistical programs can distinguish platinum, gold, copper, lead, and plastic far better than backoffice loan clerks or front-office loan reps.

To create these credit-scoring programs, math whizzes study the credit profiles, borrowing habits, and payback records for millions of people. Then they search for statistically significant correlations that tend to rate borrowers along a continuum from walk-on-water (say, 800 or higher) to neck-deep (say, 550 or lower). Credit scores range from 350 to 850, but more than 80 percent of Americans score between 600 and 800.

Secrets of the Credit Industry

Secrets of the Credit Industry

Legal strategies that credit bureaus, creditors and debt collectors do not want you to know! How to use consumer credit protection laws, without hiring a lawyer, and without going to court! At some point in your life, either you, or someone you know will need this information.

Get My Free Ebook


Post a comment