It is very wondering that everybody are running to getting online loans only, pre-approval car and shopping with credit cards. Actually everybody likes to get score on credit. This numerous three digit number is the key factor of the current financial market. A credit score is a numerical number which is generated by a mathematical algorithm of some information about your credit history to represent your creditworthiness for the benefit of the lending institution, banks and non financial associations. The all information about your credit and financial activities are gathered by the different credit bureaus to prepare their credit report. The credit bureaus are sale this credit information and credit score to the credit card companies, banks and non financial institutes too.
It is very important to know that how the credit score works by the credit bureaus. Every lender is very much depended on this credit bureaus’ report to approve the loan application of the borrower. There are lots of credit scoring models to calculate the creditworthiness of the borrowers but most of the lenders are using the FICO credit scoring model. The most common credit scoring model for the credit score users and lenders was created by Fair Isaac Co which is ranged from 300 to 850, with 723 being middle FICO score in America in 2010.
Normally the person are scored under 600 to 800 and 720 or above is the higher score to get benefited with most modest rate of interest on loan. Currently the three main companies (TransUnion, Equifax and Experian) are using own FICO scoring models. As per the FICO score the credit score has been calculated on 90 days past due in subsequent 24 months after the score has been calculated.
Nowadays the world is basically improving their investment risk management. Here are the credit ratings of the consumers as well as the borrowing companies most helpful to the investors to get back their investment safely.
