My Credit Info

And What It Shows

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How does my credit info determine whether or not I get credit?
Banks and financial institutions do not use only your credit score in determining if they extend credit. Although it certainly is a major factor and a fairly objective way to measure your credit worthiness, financial companies do look at other factors.

Some of the other specifics the financial institutions use are your employment history, how much debt you can handle based on the level of your income, your credit history as well as your FICO score.



How do lenders use my credit info?
Each lender has their own distinct underwriting guidelines. So depending on how an underwriter (the one who makes the credit decision) evaluates your information and how it fits with their guidelines will determine if you qualify for a mortgage loan, car loan, credit card or other type of loan.

Although this process is somewhat objective, it is can still be a subjective decision on whether or not you get credit. That is why some people with high scores are denied credit while other people with lower scores are approved for credit.

How long does my credit score stay the same?
If you feel as if my low credit score will affect you forever, that is not true. Your credit score is dynamic, constantly changing based on a number of factors. In fact, even each credit bureau has different scores for you.

Your credit scores and reports are nothing more than a snapshot of your financial risk at a particular time. It changes as your new information is reported to the credit bureau files.

Your score will gradually change as you change the way you handle credit. Past credit problems will have less impact on your score as time passes.



Is Credit Scoring Unfair to minorities?

It sometimes thought to be unfair to minorities. However, when considering your credit score, only credit related information is taken into account.

The Equal Credit Opportunity Act (ECOA) prohibits lenders from considering information such as race, marital status, gender, and nationality. The credit scoring models have been proven to be a consistent, accurate measure of repayment for all people who have some credit history.

Credit scoring is not unfair to minorities or people with little credit history. At any given score, minority and non-minority applicants are equally likely to pay as agreed.

So why does it seems so unfair... that is because if you have very little credit history, then you are likely to have a lower credit score.

What about my credit info privacy?

Although you can view credit scoring as infringing on your privacy, it evaluates the same information lenders would already look at anyway: your loan application, your credit card application, your credit bureau report, and/or your bank file.

The score is just a numeric summary of all of that information. So if your lender uses your scores, chances are they will ask you for less information or have fewer questions on the application you complete.




Read more about Credit Scores

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