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Info: Biography, Pictures, Discography of all CDs & DVDs |
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| Detailed account information, including payment history, credit limits, high and low balances, and any aggressive actions taken to recover overdue debts, are all reported regularly (usually monthly).This information can be quite detailed and arduous to navigate by a potential lender dealing with a new applicant.All credit bureaus also offer a supplemental service called credit scoring.Credit scoring is the process of using a proprietary mathematical algorithm to create a numerical value that alleges to be a total picture of an applicants creditworthiness.United States), are alleged to statistically analyze a credit history, in comparison to other debtors, and gauge the magnitude of financial risk.Since lending money to a person or company is a risk, credit scoring offers a standardized way for lenders to assess that risk rapidly and "without prejudice."The higher the score, the better the credit history and the higher the probability that the loan will be repaid on time; this theory purports.When creditors report an excessive number of late payments, or trouble with collecting payments, a "hit" on the score is suffered.Similarly, when adverse judgments and collection agency activity are reported, even bigger "hits" on this score are suffered.Repeated hits can lower the score and trigger what is called a negative credit rating or adverse credit history.When a lender requests a credit score, it can cause a small drop in the credit score.The consequence of a negative credit rating is typically a reduction in the likelihood that a lender will approve an application for credit under favorable terms, if at all.Note that is not the credit reporting agencies that decide whether a credit history is "adverse."It is the individual lender or creditor which makes that decision, each lender has its own policy on what scores fall within their guidelines.The specific scores that fall within a lender's guidelines is most often NOT disclosed to the applicant due to its nature as a trade secret.In the United States, a creditor is required to give a reason for denying credit to an applicant immediately and must also provide the name and address of the credit reporting agency who provided data that was used to make the decision.This article needs additional citations for verification.Please help improve this article by adding reliable references.Unsourced material may be challenged and removed.See Copyrights for details. |
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