Risk is assessed by means of a scorecard that calculates a numeric value, or score, for each applicant. The calculation of the credit score is based upon information that has proven predictive of future credit performance. The information scored is typically provided to the creditor on an application and retrieved from a credit bureau file. Categories Evaluated by Credit Scoring 1. Credit Scoring Facts Credit scoring increases the speed, accuracy, and consistency of application processing and credit analysis.
Credit scoring is completely objective.
It only looks at information that has a proven link to repaying a loan and is based only on credit related information. Credit scoring evaluates overall credit history and performance. A credit score may change each time information is provided by a creditor to a credit bureau. Managing credit responsibly will lead to a better credit score over time. All rights reserved.