How Credit Reports Are Used

A credit bureau score is one type of credit score. It is calculated from the information on your credit bureau file at the time that the information was requested. Consequently, a credit score is like a snapshot. It sums up, at one given point in time, what your past and current credit usage says about your future credit performance.

Credit scoring helps lenders apply one set of rules to everybody. The sophistication of today’s models allows for certain behavior patterns. As a result, a 20-year-old’s credit history would not be compared to a 45-year-old’s credit history. One reason these scoring models are so widely used is because they can differentiate between the credit patterns of individuals.

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Content © Rich Brott, 2011

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