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The Weight of Personal Information in Credits

By Janet Lacey
Published: Sunday, February 21st, 2010

The qualifying factors used by the major bureaus in computing for the credit worthiness rating of account holders are called credit evaluation factors. Through these factors the bureaus are able to see whether the individual is credit worthy or not. These factors differ in their bearing to the total computation of an individual’s credit score and report. But still, considering them all is the only way that individuals can note the possible ways on how they can improve their credit worthiness ratings.

Crediting and financing companies initially look at the current financial capability of those who are applying for loans, installments, and accounts. An individual with an annual income equal to $15,000 or less will most probably be rejected. Equifax, Experian and Trans Union also consider other personal factors in computing for the score and in writing the report of account holders such as age, residence and employment.

The Equal Credit Opportunity Act or ECOA was mandated by the federal government to avoid discriminating those who are applying for credits at the age of 62 and above. The ECOA legally forced the bureaus to give incentive points to individuals with different age brackets. This law automatically increases the credit score of all account holders, but on different degrees. Individuals within 18 and 25 years of age are given 2 points.

Those who are in the age bracket of 25 and 35 are given 6 points. Those who are at the age bracket between 35 and 45 are given four automatic points. Those whose ages are between 45 and 61 years are given three points. And lastly, those who are at the age of 62 years and above are given 6 automatic points. The underlying logic of the federal government in passing the ECOA is simple; discrimination is prone on older people because they are most likely living within their retirement savings. By giving incentive points in the total credit scores of these individual, they are leveled off with other account holders.

The duration of the account holder’s residency in one place can help in increasing his or her current credit worthiness ratings. Most of the time creditor bureaus give extra points to those who have resided in a place for at least two years. The longer the account holder stays in that place the better.  The credit scores of those who use mail box as address will have a hard time becoming credit worthy. This is the case for metropolitan areas. But nothing can be compared to the benefits of owning a house in increasing his or her credit worthiness ratings.

The employment records of account holders can make their credit reports and credit scores relatively better or worse. Account holders who were able to stay for two years in the same job have higher chances in appearing more credit worthy. In the event that the account holder’s duration of employment is insufficient, the length of their stay in the same field is considered by bureaus. Those who are self employed must give every document that bureaus ask for to establish that they are financially well and sound.

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