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June 26, 2001
By
Mindy Gratwicke
Website:
http://www.1st-choice-credit-cards.com
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What is a credit rating score?
A credit rating score is a system creditors us to help determine whether or not to give an individual credit. Your credit rating score consists of information regarding your credit experiences, such as your bill paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts. All this information is collected form your credit application and your credit report.
Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles. A credit rating score system awards points for each factor that helps predict who is most likely to repay a debt. A credit rating score helps predict how creditworthy you are, in other words, how likely it is that you will repay a loan and make the payments when due.
A credit rating score is based on real data and statistics. It is more reliable than subjective or judgmental methods, and it treats all applicants objectively. Each creditor may use it’s own credit scoring model, or a generic model developed by a credit scoring company. Though, there are different types of credit rating score models for different types of credit. Under the Equal Credit Opportunity Act, a credit scoring system may not use certain characteristics like; race, sex, national origin, or religion, but they may use an individual’s age. Remember that these systems generally vary from creditor to creditor.
For
more information on credit rating score - click here!
> About The Author:Mindy Gratwicke is a successful author and the
publisher of http://www.1st-choice-credit-cards.com. A one-stop resource on on-line credit reports, credit rating, and report repair. *Webmasters,
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