What is a
Credit Bureau Score?
Credit bureau scoring is a statistical means of assessing
how likely a borrower is to pay back a loan. A Credit Bureau Score is based on
the data available in the borrower's credit report. The score measures the relative
degree of risk a potential borrower represents to the lender or investor. It is
not a measure of a borrower's income, assets, or bank account, although those
and other factors are still considered by lenders and investors, independent of
the score.
Fair,
Isaac Credit Bureau Scores range from approximately 375 to 900 points, and are
available through the three national credit data repositories (Equifax, Trans
Union, and Experian). All of these three models are often referred to as "FICO
scores. The scoring programs reside at these credit bureaus and are called:
BEACON | at
Equifax (formerly CBI) |
EMPIRICA | at
Trans Union |
The
TRW/Fair, Isaac Model | at
Experian (formerly TRW) |
Fair,
Isaac is not able to access a borrower's credit bureau data, make corrections
to credit bureau data, or calculate a score.
A
fair, Isaac Credit Bureau Score, sometimes referred to as a FICO score, is calculated
by a system of score cards. In developing these score cards, Fair, Isaac uses
actual credit data on millions of consumers, and applies complex mathematical
methods to perform extensive research into credit patterns that forecast credit
performance. Through this process, Fair, Isaac identifies distinctive credit patterns.
Each pattern corresponds to a likelihood that a consumer will make his or her
loan payments as agreed in the future. The score is based on all the credit-related
date in the credit bureau report-not just negative data such as missed mortgage
payments or bankruptcies.
Payment history
Public record
and collection items Severity,
recency and frequency of delinquencies noted in trade line section
Outstanding
debt Number
of balances recently reported Average
balance across all trade lines Relationship
between total balances and total credit limits on revolving trade lines
Credit
history Age
of oldest trade line Number
of new trade lines
Pursuit of New credit Number
inquiries and new account openings in the last year Amount
of time since most recent inquiry
Types of credit in use
Number of trade lines reported
for each type: Bank
card Travel and
entertainment cards Departments
store cards Personal
Finance company references Installment
loans Other
