Scoring models and other tools analyze data only, using it to predict future credit performance.

A scoring model contains a list of questions and answers, with points given for each answer. Information proven to be predictive of future credit performance is used in the model.

Here are a few examples of what a typical model will consider:

• Information from your credit application
• How long you’ve lived at your address
• Your job or profession
• How much you owe

It will also consider information pulled from your credit bureau report, such as the number of late payments, the amount of outstanding credit, the amount of credit being used, the amount of time credit has been established. Credit scoring systems do not consider race, religion, gender, marital status, birthplace or current address.

Your thoughts on this subject? Your comments appreciated!

Content © Rich Brott, 2011

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