Credit Score News, Tips & Advice
Website CertifiedPrivacy Protected

Know Which Model Your Creditor Uses to Compute

By George Hauser
Published: Sunday, October 25th, 2009

Have you ever encountered a credit score advice that tells you to check what scoring model was used to compute for your credit score? If not, then it is about time that you receive such advice. You know that checking your credit report regularly can help you to keep tabs on your credit score. However, you will never really feel the true value of your credit score if you do not know which model your potential creditors use to compute for your credit score.

If you do not know which model is used by your creditor, them you are among the 96% who have no idea about the model used by their creditors too. You might not be so obsessed with gathering credit score advice if you have an idea of the models used to compute for your credit score. There are hundreds of models that your creditors will use to compute your credit score and these models have different categories to determine credit risk. Nonetheless, your credit score will be what a potential lender will be looking at to decide if you are creditworthy.

One credit score advice that you can heed to test the truthfulness of the aforementioned is to check your credit score with one of the major credit bureaus. You might find that you have a high credit score of 900. Consider this situation: you went to apply for a loan but your lender tells you that you will have to pay higher interests, your lender says, you have a credit score of 690. In other words, the score you saw is different from what your lender tells you but both of these scores are still valid.

As mentioned, there are a hundred ways to compute for your credit score and each lender may be using a different one. Each model uses different algorithms in computing for your credit score and you may never know which model your creditor uses, especially if you check online. Nevertheless, try to look for credit score advice that tells you how to generally get a good credit score in order not to run the risk of getting a low score and being refused an application of mortgage, loans or other credit lines.

There is actually a simple way of knowing what model your creditor will be using—call your creditor. Before you apply for anything, call your potential lender and ask them what model they would be using to compute for your credit score. Do this in advance so you will have time to correct anything wrong that might affect your credit score through the help of a reliable credit score advice. It can be a little bit hassling because you may have to call several times before they direct you to the person who knows what model they would be using to compute for your credit score. Be patient, though, because it will pay off. You are at a great advantage if you are aware of what model your creditor will be using.

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.