As word gets out that more and more lenders use credit scoring to swiftly qualify applicants, uninformed consumers who try to beat the system could end up with results that are the opposite of what they hoped for. The score represents a statistical evaluation of how likely you are to default on a loan. The higher the score, the lower the probability you'll default. Equifax , Experian and Trans Union . Fair, Isacc's stastical-modeling software crunches the numbers from your credit report data to come up with a score.
Some lenders rely more heavily on credit scoring than others.
While it can speed up your loan application, it can also reject it. It is, after all, only a computer-generated number and the best lenders consider additional factors. For instance, suddenly canceling many cards with small balances and then shifting all the debt to fewer cards effectively raises the ratio of your unpaid balances to the maximum credit lines available on fewer cards. To the software, it appears as if your financial situation has tightened. Quick fixes won't get you the loan, but there are some strategies to get you the highest score possible.