Shopping on line can be easy, simple and save you lots of money. It can also take a lot of your time, frustrate you, and result in unwanted purchases. Now the same can be said for regular high street shopping, but with the vast opportunity presented by the Internet it will pay you to spend a few minutes reading this and understanding how to better optimize your Credit Scoring shopping experience:
1. Compare - without doubt the biggest advantage that the Credit Scoring offers shoppers today is the ability to compare thousands of Credit Scoring at a time. This is a great thing, but not necessarily all the time! Too much can be daunting at times so take advantage of the great comparison sites and where possible let them do the hard work for you.
2. Research - if it has been said it will be on the internet. Ignorance is no longer a justifiable reason for buying the wrong thing. Take the time to research in detail everything that you could possible want to know about
3. Testimonials - don't know anybody that has bought a Credit Scoring? Wrong! If the Credit Scoring is good the internet will let you know. Use the Internet as a friend and get testimonials before you buy.
4. Questions - Got a question about Credit Scoring then search the Forums, FAQ's, Blogs etc. Don't be afraid to ask .....
5. Reputation - Never heard of the company selling Credit Scoring? Don't worry, no reason why you should know every company in the world, but you know someone that does! Use the internet to find out what people are saying about Credit Scoring and build up a picture of their reputation for sales, returns, customer service, delivery etc.
6. Returns - still worried that even after all of the above your Credit Scoring wont be what you want? Check out the returns policy. There is so much competition now that someone, somewhere is bound to offer the terms that you are comfortable with.
7. Feedback - happy with your Credit Scoring then let people know, after all you are depending on others people input in your buying decision, so why not give a little back.
8. Security - check for the yellow padlock on the Credit Scoring site before you buy, and the s after http:/ /i.e. https:// = a secure site
9. Contact - got a question about Credit Scoring, or want to leave a comment then check out the sites contact page. Reputable companies have them and respond.
10. Payment - ready to pay for your Credit Scoring, then use your credit card or PayPal! Be aware of companies that don't accept them, there may be genuine reasons but given the huge amount of choice you have when buying online there is no reason at all not to buy via credit card or PayPal.
A
credit score is a numerical expression based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person, which is the likelihood that the person will pay his or her debts in a timely manner. A credit score is primarily based on credit report information, typically sourced from credit bureau.
Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what
interest rate, and what credit limits. The use of credit or
identity scoring prior to authorizing access or granting credit is an implementation of a trusted system.
Credit scoring is not limited to banks. Other organizations, such as mobile phone companies, insurance companies, employers, and government departments employ the same techniques. Credit scoring also has a lot of overlap with
data mining, which uses many similar techniques.
Australia
In Australia credit scoring, although not as mature in its application compared to the US, is widely accepted as the primary way applicant creditability is assessed. Credit scoring is not only used to determine whether credit should be approved to an applicant, but credit scoring is also used in the setting of credit limits on credit cards/store cards, in behavioural modelling such as collections scoring, and also in the pre-approval of additional credit to a companies existing client base.
Although logistic, or non-linear probability modelling, is still the most popular means by which to develop scorecards various other methods offer extremely powerful alternatives, including MARS, C&RT, CHAID, and Random Forests.
Canada
The system of credit reports and scores in Canada is very similar to that in the United States, with two of the same credit reporting agencies active in the country (Equifax and TransUnion). There are, however, some key differences. One such difference is that, unlike the United States, where a consumer is allowed only one free copy of his or her own credit report each year, in Canada the consumer may order a free copy of his or her own credit report any number of times in a year, as long as the request is made in writing, and that the consumer asks for a printed copy to be delivered by mail. Equifax form (Canada) TransUnion form (Canada) This request by the consumer is noted in the credit report but has no effect on his or her credit score.
The Government of
Canada offers a free publication called
Understanding Your Credit Report and Credit Score Understanding Your Credit Report and Credit Score (Canada) This publication provides sample credit report and credit score documents with explanations of the notations and codes that are used. It also contains general information on how to build or improve credit history, and how to check for signs that identity theft has occurred. The publication is available online at the Financial Consumer Agency of Canada. Paper copies can also be ordered at no charge for residents of Canada.
United Kingdom
In the U.K. there is much academic research into credit scoring. Experts from banks, academia and government agencies gather bi-annually at the "Credit Scoring & Credit Control" conference in Edinburgh.
The most popular statistical technique used is
logistic regression to predict a binary outcomesuch as bad debt or no bad debt. Some banks also build regression models that predict the amount of bad debt a customer may incur. Typically this is much harder to predict and most banks focus only on the binary outcome.
Credit scoring is closely regulated by the
Financial Services Authority.
It is very difficult for a consumer to know in advance if he or she will have a high enough credit score to be accepted for credit with a particular lender. This is due to the complexity and structure of credit scoring which differs from one lender to another.
Also, lenders do not have to reveal their credit scoring methods, nor do they have to reveal the minimum credit score required for the applicant to be accepted. Simply due to this lack of information to the consumer, it is impossible for him or her to know in advance if they will pass a lender's credit scoring requirements.
If the applicant is declined for credit, the lender is also not obliged to reveal the exact reason why.
United States of America
In the United States, a credit score is a number based on a statistical analysis of a person's credit files, that represents the
creditworthiness of that person, which is the likelihood that the person will pay his or her bills. A credit score is primarily based on credit report information, typically from the three major credit bureau, namely
Experian, Transunion and
Equifax.
There are different variants of calculating credit scores. FICO is a credit score developed by
Fair_Isaac. It is used by many mortgage lenders that use a risk-based system to determine the possibility that the borrower may default on financial obligations to the mortgage lender.
American's are entitled to one free credit report within a 12 month period from each of the three agencies. The three credit bureaus run
Annualcreditreport.com, where users can get their free credit report, normally without credit scores. Credit scores are available as an add-on feature of the report for a fee.
In some states, such as California, a consumer is also entitled to a free credit report within 30 days of being denied credit or receiving sub-normal credit terms from a lender due to their credit rating.
References
See also
External links
- Factors That Affect Your Credit Score Video
- FTC Guide to Credit Scores
- Financial Consumer Agency of Canada
- Direct.gov.uk Guide to Credit Scores
A
credit score is a numerical expression based on a statistical analysis of a person's credit files, to represent the
creditworthiness of that person, which is the likelihood that the person will pay his or her debts in a timely manner. A credit score is primarily based on
credit report information, typically sourced from
credit bureau.
Lenders, such as
banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. The use of credit or identity scoring prior to authorizing access or granting credit is an implementation of a
trusted system.
Credit scoring is not limited to banks. Other organizations, such as mobile phone companies, insurance companies, employers, and government departments employ the same techniques. Credit scoring also has a lot of overlap with
data mining, which uses many similar techniques.
Australia
In Australia credit scoring, although not as mature in its application compared to the US, is widely accepted as the primary way applicant creditability is assessed. Credit scoring is not only used to determine whether credit should be approved to an applicant, but credit scoring is also used in the setting of credit limits on credit cards/store cards, in behavioural modelling such as collections scoring, and also in the pre-approval of additional credit to a companies existing client base.
Although logistic, or non-linear probability modelling, is still the most popular means by which to develop scorecards various other methods offer extremely powerful alternatives, including MARS, C&RT, CHAID, and Random Forests.
Canada
The system of credit reports and scores in Canada is very similar to that in the United States, with two of the same credit reporting agencies active in the country (Equifax and TransUnion). There are, however, some key differences. One such difference is that, unlike the United States, where a consumer is allowed only one free copy of his or her own credit report each year, in Canada the consumer may order a free copy of his or her own credit report any number of times in a year, as long as the request is made in writing, and that the consumer asks for a printed copy to be delivered by mail. Equifax form (Canada) TransUnion form (Canada) This request by the consumer is noted in the credit report but has no effect on his or her credit score.
The Government of
Canada offers a free publication called
Understanding Your Credit Report and Credit Score Understanding Your Credit Report and Credit Score (Canada) This publication provides sample credit report and credit score documents with explanations of the notations and codes that are used. It also contains general information on how to build or improve credit history, and how to check for signs that identity theft has occurred. The publication is available online at the
Financial Consumer Agency of Canada. Paper copies can also be ordered at no charge for residents of Canada.
United Kingdom
In the U.K. there is much academic research into credit scoring. Experts from banks, academia and government agencies gather bi-annually at the "Credit Scoring & Credit Control" conference in Edinburgh.
The most popular statistical technique used is logistic regression to predict a binary outcomesuch as bad debt or no bad debt. Some banks also build regression models that predict the amount of bad debt a customer may incur. Typically this is much harder to predict and most banks focus only on the binary outcome.
Credit scoring is closely regulated by the Financial Services Authority.
It is very difficult for a consumer to know in advance if he or she will have a high enough credit score to be accepted for credit with a particular lender. This is due to the complexity and structure of credit scoring which differs from one lender to another.
Also, lenders do not have to reveal their credit scoring methods, nor do they have to reveal the minimum credit score required for the applicant to be accepted. Simply due to this lack of information to the consumer, it is impossible for him or her to know in advance if they will pass a lender's credit scoring requirements.
If the applicant is declined for credit, the lender is also not obliged to reveal the exact reason why.
United States of America
In the United States, a credit score is a number based on a statistical analysis of a person's credit files, that represents the
creditworthiness of that person, which is the likelihood that the person will pay his or her bills. A credit score is primarily based on
credit report information, typically from the three major
credit bureau, namely Experian, Transunion and Equifax.
There are different variants of calculating credit scores. FICO is a credit score developed by
Fair_Isaac. It is used by many mortgage lenders that use a risk-based system to determine the possibility that the borrower may default on financial obligations to the mortgage lender.
American's are entitled to one free credit report within a 12 month period from each of the three agencies. The three credit bureaus run Annualcreditreport.com, where users can get their free credit report, normally without credit scores. Credit scores are available as an add-on feature of the report for a fee.
In some states, such as California, a consumer is also entitled to a free credit report within 30 days of being denied credit or receiving sub-normal credit terms from a lender due to their credit rating.
References
See also
- Credit history
- Credit reference
- Adverse Credit History
- Credit rating agency
External links
- Factors That Affect Your Credit Score Video
- FTC Guide to Credit Scores
- Financial Consumer Agency of Canada
- Direct.gov.uk Guide to Credit Scores
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