A risk score is simply a tool used by lenders to help make good credit granting decisions. In the past, lenders manually assigned values to the information on your credit report and made their decision based on that information. This process was time consuming and allowed the personal opinions of lenders to have an influence on their decisions. Risk scoring formulas, or models, assign values to credit information in much the same way as the manual method. But by automating the review process, personal bias is removed from the decision.
Different lenders use different models to calculate risk scores.
The models may have been developed by one of the credit bureaus, the lender or by one of several companies that specialize in developing these tools. At a credit grantor's request, credit bureaus will calculate a risk score when a lender accesses a particular credit report. The score is a summary of information in the credit report at that moment in time and becomes less meaningful as the report changes. It therefore is not added to your report. Second, there are many types of risk scores.