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The Essence of Knowing the Credit Scoring Model of Your Issuer

By Andy Snyder
Published: Wednesday, June 9th, 2010

Credit score advices can be used by credit card holders in different ways. Some advice can be used to boost the credit score itself, others to help creditors learn the importance of their credit score, while there are advices that inform credit holders to what scoring models do their credit card companies or creditors or issuers use. This article will try to give or provide those three, but more importantly this article will focus more on the third one, which is to inform credit card holders to know what scoring models do their credit card companies or creditors or issuers use

Credit scoring models are designed to compute for credit scores of credit holders. Credit scores determine the future financial capabilities or financial chances credit card holders can be permitted to take or do. Financial chances like, having a loan, opening a new credit card, and the likes are determined by what is shown or reflected by a credit card holder’s credit score.

Credit issuers, and/or creditors base their objection or permission on a credit holder’s financial request, through the help of that credit holder’s credit score. And thus, making it as one credit score advice is for credit holders to value their credit scores. Value, meaning not only know the credit score itself, but also to keep it high and reputable. But how can a credit holder value something if he/she does not know how is it made, specifically for credit scores is how is it computed.

The next credit score advice for credit holders, aside and before valuing his/her credit score is to know what credit scoring model does his/her credit issuers or creditors use in determining or computing his/her credit score.

Hundreds of credit scoring models can be possibly used by credit issuers or creditors in order to compute and determine a credit holder’s credit score. These credit scoring models, which is by the way, categorized in different ways, depending on ho these models will determine whether a credit holder is either a good or bad risk, depending on their credit score.

But be aware, that this credit scoring models can be sometimes disadvantageous. And if in case you as a consumer is trying to look for a possible credit issuer or creditor, as another credit score advice, try to prove first the reliability of the credit scoring model that the credit issuer or creditor is using. You, as a consumer, can do this by comparing the credit issuers or creditor’s scoring model with the major credit bureaus.

Comparing credit scoring models can be a good credit score advice. Because in some credit scoring models, a credit score of a certain credit holder can be as high as 850, but when that same credit score of that same credit holder is put to the test using a different credit scoring model, it could only have a score of 700. But take note, that both are considered valid scores.

Different scores that produced or yielded by different scoring models are considered valid, because scoring models follow different procedures in computation. So better yet, as another credit score advice, before applying for credit card from certain credit issuer or creditor, call them and ask for their credit scoring model, and try to look for a credit issuer or creditor that uses a credit scoring that gives you a good credit score and also has good policies, an affordable interest rates.

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