Credit scoring is a system creditors use to help determine whether to give you credit. Before you request your loan get your credit score and a personal score analysis.

Information about you and your credit experiences, such as your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report.

Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points-a credit score-helps predict how creditworthy you are, that is, how likely it is that you will repay a loan and make the payments when due.

Where to get your credit score online

For the first time, you can get all three of these items online - for FREE!

• FREE online Credit Report in seconds - easy-to-read with color graphics and explanantions
  
  
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• FREE Debt and Income Analysis examines your personal borrowing power
  

It's more than a free credit report—it's a free credit PROFILE!

This also includes a 30-day trial of Credit Monitoring with weekly fraud-watch emails to keep you informed about your credit and protected against fraud.

Why is credit scoring used?

Credit scoring is based on real data and statistics, so it usually is more reliable than subjective or judgmental methods. It treats all applicants objectively. Judgmental methods typically rely on criteria that are not systematically tested and can vary when applied by different individuals.

How is the credit scoring model developed?

To develop a model, a creditor selects a random sample of its customers or a sample of similar customers, if their sample is not large enough, and analyzes it statistically to identify characteristics that relate to creditworthiness. Then, each of these factors is assigned a weight based on how strong a predictor it is of who would be a good credit risk. Each creditor may use its own credit scoring model, different scoring models for different types of credit, or a generic model developed by a credit scoring company.