Creditors Use More Than Your Credit Score to Judge You

average-credit-scoreBy now, most of us are familiar with the magical three digit number that helps lenders determine if you are a good lending candidate.  Your credit score is a major indicator of your financial life, but it is not the only ‘score’ considered when you’re looking for financing.  There are other factors creditors examine to gauge if you’ll be a good customer.

The first is your Behavior Score, which looks at your long-term credit usage.  This takes into consideration where you shop, over limit occurrences, and late payments.  The next is your Profitability Score, which, as you may imagine, describes how much profit you’ll generate as a customer.  Your Bankruptcy Score tells lenders how likely you are to file for bankruptcy.  This helps the lenders gauge your risk, and plan accordingly for meeting mandated bad debt reserves. Another risk assessment score is your Collection Score which details how you’ve managed collection accounts in the past. This determines how aggressive collectors may be should you fall behind.  Lastly, there is an Attrition Score which tells lenders how likely you are to use competitors product.

All of this information is captured from your credit report, so it’s important to review yours just in case of inaccuracies.   To get copies of your report from each of the major credit reporting agencies, please visit www.annualcreditreport.com.  To learn more about these additional scores, I encourage you to read 5 Ways Every Credit Customer is Judged.  Until next time, I’m Thom Fox for Cambridge Credit Counseling.

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About Cambridge Credit Counseling Corp.

Cambridge Credit Counseling Corp. offers its financial education to consumers throughout the United States. Our experienced staff is dedicated to helping people understand and manage their debts by providing personalized attention and a free, comprehensive review of each consumer’s financial situation. It is our objective that, as consumers become more educated about debt and the impact it can have on their lives, they can apply this knowledge to successfully manage their finances in the future.

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