What is a credit bureau score, and how is it calculated?
Credit bureau scoring is a scientific way of assessing how likely your client is to pay back a loan from the data available on his/her credit report. The score measures the relative degree of risk a client represents to the investor. It is not a measure of your client’s income, assets, or bank accounts, although those and other factors are still considered by lenders independent of the score. Fair Isaac has developed several different scorecards to calculate a consumers credit score. Fair Isaac leverages actual credit data on millions of consumers, and uses complex mathematical methods to perform extensive research into credit patterns that forecast credit performance. Through this process they identify distinctive credit patterns. Each pattern corresponds to a certain likelihood that a consumer will make his/her loan payments as agreed in the future. The score is based on all the credit-related data in the credit bureau report-not just negative data such as missed payments or bankrupt
