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Credit Scoring

Filed Under:
Publication Number: P2372
Updated: March 31, 2016
View as PDF: P2372.pdf

Have you ever wondered how a lender decides whether to grant you credit? Credit scores are one tool used by lenders to evaluate your ability to repay loans. Since they are used so widely today, it is a good idea to learn as much as possible about credit scoring and how your behavior can affect your credit score.

Information about you and your credit experiences, such as payment history, number and type of credit accounts you have, collection actions, outstanding debt, and age of your accounts is gathered from your credit application and credit report. Using a complex statistical program, this information is compared to the credit performance of consumers with similar profiles. The credit scoring system awards points for each factor that helps predict likelihood of repaying debt. The total number of points—your credit score—helps predict creditworthiness.

Download the PDF above for more information.

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