What are credit scores?
A credit score (such as FICO – developed by Fair Isaac & Co and used by Experian, or BECON developed and used by Equifax or EMPIRICA developed and used by Trans Union) or credit scoring is a method of determining the likelihood that a credit user (you) will pay their bills. Fair Isaac began its pioneering work with credit scoring in the late 1950’s. Since then scoring has become widely accepted by lenders as a reliable means of credit evaluation. A credit score attempts to condense a borrowers credit history into a single number. Fair, Isaac & Co. and the credit bureaus do not reveal how these scores are computed. The Federal Trade Commission has ruled this practice to be acceptable. Credit scores are calculated by using scoring models and mathematical tables that assign points for different pieces of information that best predict future credit performance. Developing these models involves studying how thousands, even millions, of people that have used credit. Score-model developer
