Credit Scores

Credit Scores - Credit scores are obtained by taking a persons credit report (usually obtained from Equifax or another large credit reporting agency) and comparing past and present credit history with a large sampling of other clients or customers. Many factors are taken into account when calculating credit scores, such as whether you own your own home, whether you have had loans in the past and if so did you make the payments on time. Do you own any credit cards, or if you have owned credit cards in the past, were the payments on time? These types of questions can help creditors in determining individual credit scores, which will determine your creditworthiness, or whether or not you qualify for a loan or credit card.

Credit scores often differ from one bank, credit or financial institution to the next. This is because not only is the method often different from one bank to the next, but the actual comparative sample could be much different. Also, some banks or credit institutions may use too small of a sample, which may cause the credit scores to come out much lower then if a larger sampling was used to determine the credit scores. By knowing what method individual banks or credit institutions use to determine credit scores you can be one step ahead of the game. You should not be afraid to ask about their method or the size of sample they use to determine credit scores, especially if they tell you that your credit score is too low to obtain a loan or other financial assistance.

By questioning the methodology and such of their credit scores, you may cause the bank to re-examine their initial decision and turn around and approve you for the loan, especially if you have good reason to believe that your credit scores should be much higher then they obtained. Many times people are turned down for a loan or credit card because the bank or credit institution used outdates or insufficient information in their determination. There's no reason why you shouldn't question them as to the methods used to obtain credit scores. You may find that because of your refusal to accept no, that no could very well turn into a yes, and you could obtain your next loan or credit card, because you took the time to learn about credit scores and how they pertain to your credit.

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