Credit Report Bureaus
Objective tactics are widely used by credit report bureaus to establish an amount for credit to approve to an applicant. Credit scoring is formulated from the information provided through different methods, may it be by a third-party organization, by the credit grantor, or by the credit report agencies or bureaus in collaboration with the creditors and lenders. Some of the most general aspects in credit score reports are income, assets, type of occupation, length of employment, length of living in one place, and credit history including installment and personal loans made. Credit bureau scoring are generally called FICO scores for the reason that the three main credit reporting agencies, namely Equifax, Experian, and Trans Union, use scoring system created from software developed by Fair Isaac and Company. FICO score is the most extensively used scoring system in determining the financial health of an applicant. It has a range of 350 to 850 with 850 as the highest possible score. Lenders and creditors such as banks, government agencies, utility services and more others, use credit scoring in which the credits and loans are based on the risk and probability of settlement. Off-putting information in relation to the credit history, such as unable to pay accounts on time, too many credit accounts, large amount of the total credit from all accounts and number of accounts with balances, will stridently decrease an applicant’s credit score. Therefore, the higher the person’s credit score, the better the credit limit and lower interest rates offered to the applicant by the credit companies.