How is a Credit Report Score Obtained?
The credit reporting agency calculates the credit score by using a standard computing formula. The score is monitored and periodically updated to highlight the latest developments on the consumer loan repayment rates. The score is obtained by comparing a consumer with personal or business competition. The common rostrum is accessed by considering other players within a similar population. The consumer is graded according to mathematical variables obtained on using the special formula. The score is the result of figures fed into a scoring model. The credit bureaus use different proprietary credit-scoring models and hence there is a visible difference in the scores obtained from all three. There is a median score and while the lowest scores are further from it, the highest scores surpass it. The governing law emphasizes that the credit-scoring models must be empirical in nature. They have to be statistically sound and result in accurate scores. Importance of a Credit Report Score: The fi
