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Like It Or Not, You Have A Score To Settle (Part 1)
from: CreditandYou.comJust when most people finish with school and can stop worrying about test scores, there’s a new kind of scoring that enters the picture. It’s called credit scoring. And, its impact on your financial future can mean more to you than a college degree.
You may never know your precise credit score, but you need to know if you’re at risk!
Credit Scoring ... Why It’s So Important:
Ever wonder how a creditor decides whether to grant you credit? For years, creditors have been using credit scoring systems to determine if you’d be a good risk for credit cards and auto loans. More recently, credit scoring has been used to help creditors evaluate your ability to repay home mortgage loans.
Precisely what is credit scoring?
Credit scoring is a system creditors use to help determine whether to give you credit. Information about you and your credit experiences, such as bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and age of your accounts is collected from credit applications and your credit report.
Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. Total number of points (credit score) helps predict how creditworthy you are; how likely it is that you will repay a loan and make payments when due.
You may never know your precise credit score, but you need to know if you’re at risk!
Why is credit scoring used?
Credit scoring is based on real data and statistics, so it usually is more reliable than subjective or judgmental methods. It treats all applications objectively. Judgmental methods typically rely on criteria that are not systematically tested and can vary when applied by different individuals.
To develop a model, a creditor selects a random sample of its customers (or a sample of similar customers if their sample is not large enough), and analyzes it statistically to identify characteristics that relate to creditworthiness. Then, each of these factors is assigned a weight based on how strong a predictor it is of who would be a good credit risk.
Each creditor may use its own credit scoring model, different scoring models for different types of credit, or a generic model developed by a credit scoring company.
How reliable is the credit scoring system?
Credit scoring systems enable creditors to evaluate millions of applicants consistently and impartially on many different characteristics. But to be statistically valid, credit scoring systems must be based on a big enough sample. Remember that these systems generally very from creditor to creditor.
Although you may think such a system is arbitrary or impersonal, it can help make decisions faster, more accurately, and more impartially than individuals when it is properly designed.
In fact, many creditors design their systems so that, in marginal cases, applicants whose scores are not high enough to pass easily, or are low enough to fail absolutely are referred to a credit manager who decides whether the company or lender will extend credit. This may allow for discussion and negotiation between the credit manager and the consumer.
What happens if you are denied credit or don’t get the terms you want?
For the answer to that crucial question and how to improve your credit score, be sure to read Part II of “Like It Or Not, You Have A Score To Settle.”
Credit and You are a group of expert on credit and the authors of “CREDIT AND YOU ... Secrets To Improving Your Credit Rating.” Feel free to pass this article along to family and friends. And be sure to pick up your FREE 7 day course on “Credit Basics” at http://www.creditandyou.com
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Refinancing Home Mortgage Rates News
Mortgage Bonds Face Eye of Storm as Refinancings Decline: Credit Markets - Bloomberg
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Mortgage rates: How low can they go? - Christian Science Monitor
 Christian Science Monitor | Mortgage rates: How low can they go? Christian Science Monitor the average rate for a 30 year fixed rate mortgage dropped to 3.33 percent since last week, while the purchase application volume increased 0.1 percent and the refinance application jumped 9.4 percent over the same period. Refinances Surge on Record Low Mortgage Rates Mortgage applications jump as interest rates hit new lows Mortgage applications jump on refi demand: MBA |
BofA Stalls Refinance Work as Wells Is 'Open for Business' - BusinessWeek
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Obama Mortgage Refinancing Plan: A Bailout by Any Other Name - National Legal and Policy Center
 National Legal and Policy Center | Obama Mortgage Refinancing Plan: A Bailout by Any Other Name National Legal and Policy Center The Federal Reserve purchased $1.25 trillion in mortgage securities to keep mortgage rates down. And the Obama administration created the still-operative Home Affordable Modification Program (HAMP) and Home Affordable Refinance Program (HARP) to make ... Obama's Refinancing Plan Means Fee for Homeowners Barack Obama | Homeowners have earned a fair shake from banks Reduce the principal to fix the housing mortgage crisis |
Rural Nevada Homeowners Can Lower Mortgage Rates - KTVN
Rural Nevada Homeowners Can Lower Mortgage Rates KTVN The US Department of Agriculture's Rural Development Office is letting some rural Nevadans refinance to lower their mortgage rates. The Single Family Housing Guaranteed Rural Refinance Pilot Program will operate in 19 states (including Nevada) for ... Rural Nevada homeowners might be able to refinance your loans USDA in Nevada announces rural refinancing program for homeowners | The Republic |
Refinance Mortgage Rates at Wells Fargo: Massive Savings Still Available - News Sizzle
 News Sizzle | Refinance Mortgage Rates at Wells Fargo: Massive Savings Still Available News Sizzle Recent weeks and months have brought about some of the most incredible opportunities for home refinances at the lowest rates in as long as a generation, with Wells Fargo (NYSE:WFC) consistently leading in relation to quality and value. Wells Fargo Reports 728024 Active Trial and Completed Modifications Through ... |