credit score calculation formula

Credit Scoring

What is a credit score?

Imagine you walk on the beach in a bathing suit. Too scared? Okay, imagine someone else and see a crowd. The public has a poster that read "10" or "6.5" according to the attractiveness of the person in a bathing suit is theirs. Crass? Unfair? Subjective?

In game credit, people judge that it is a company called Fair Isaac "and the numbers vary from 375 to 900. This is your credit score FICO score which largely determines the attractiveness of credit to large numbers of people (ie, banks, insurance companies, loan companies).

It's just annoying to know that they are judged on anything. But what will be judged by what they have little control over, or even know the criteria on which they are judged? It's like use a blue bikini and heels, not knowing that you should wear a red bikini and sandals, a higher score.

This is not an exaggeration. Long time was not rating criteria. It was only after huge public and government pressure, consumers are now allowed to obtain credit, although the formula used to calculate your score is as mysterious as the recipe for love.

Your credit score accumulated data from a credit bureau that issues your credit report. Your score is based on the number of credit accounts you have, your payment history and your personal information, and is derived from a calculation so complex that there is no exact formula for printing. But it is a measurement surface statistical or you do not meet the credit in the future.

Fair Isaac has developed a statistical model (used by the three credit bureaus and most banking institutions), but does not reveal the exact recipe for the model. The company claims that its model is a proprietary system, and keep it a secret guarantee its sustainability. If the product has been distributed, how Fair Isaac make money? What most people do not realize is that the credit scoring model is a product sold in credit institutions and, of course, the credit bureaus.

This assessment model has not begun to be the industry standard, but since has been the most complete model on the web when the banking sector has been interested in this information, has become an integral part of the process of granting credit. The model took years to develop, and Fair Isaac have all kinds of empirical data to support its accuracy. The lending industry believes that this model is correct and accurate.

Since almost everyone uses it, implies that everyone is measured by the same comparison. Many (if not most) American and Canadian consumers have to thank you for this statistical model.

At the conference in scoring credit available to the Federal Trade Commission in July 1999, Fair Isaac gave the opening presentation and talked about some of the objects used in the calculation of consumer credit scores. What I discovered, is that much part of what happens in the score calculation is beyond the control of consumption.

What exactly factors into your credit score?
Here is a list of items that serve to mark, in order of importance. (Information marked with an asterisk [*] is obtained from the information provided upon request and is not taken into account in a note by the credit bureau.)
1. Major derogatory items on your report (that is bankruptcy, collections, exclusion, slow payment);
2. Time in current job;
3. Occupation (professionals are given the heavy weight) *
4. Time at current address;
5. Proportion balances available credit lines (the lowest);
6. You or your landlord (if you do, is heavily weighted) *
7. Number Recent surveys;
8. Age (50 + is better);
9. Number of lines on your credit report;
10. The number of years you've had credit on the basis of data from the credit bureau.

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www.Citicredit.asia