Credit Reporting Websites - Choosing a Reliable Provider
If you are currently looking for a website to provide you with credit reporting or monitoring services, our advice would be that you do so with great care and caution. Whilst the majority of websites out there offering credit score services are highly reliable - there are always the odd few which do nothing to add to the reputation of the industry on the whole.
How Identity Theft Can Affect Your Credit Score
We've all heard of the impending threat of identity theft, especially in today's modern electronic world. Whenever we hear the term, we automatically think of people sitting in a dark room, in a far away country - counting the pennies from people who they have successfully scammed.
Credit Scorecards - What Are They and Who Uses Them?
Don't mistake a credit score for a credit scorecard - they are not the same thing. In this article, we will take a look at the difference between these two things - both of which are reports - but both of which serve a different purpose.
Credit Scorecards - What Are They and Who Uses Them?
Don't mistake a credit score for a credit scorecard - they are not the same thing. In this article, we will take a look at the difference between these two things - both of which are reports - but both of which serve a different purpose.
Hopefully by now you know what your credit score is. To put it simply - your credit score is a numerical figure which is used to sum up your financial history. For example, all of the times you have applied for credit (and been successful), repayment history, default history, etc. is all accumulated, analysed, and then modelled in to the figure you know as your credit score.
So what is a credit scorecard? Let's find out.
What Is A Credit Scorecard?
To put it in the simplest way as possible - a credit scorecard is a model which is used by a financial institution to assess and predict your behaviour.
Let's say that you have the following entries on your credit report:
- 2 applications for credit (both accepted).
- 3 current repayment obligations (all up to date).
- No defaults or missed payments in the past.
From this information, any clever person could tell that the consumer with such a report is likely to be a reliable person to lend money to. Hence, we would favour them more than someone who had many defaults and previous blemishes on their record.
You'll notice that we came to this decision by looking at all the data, and then deciding upon how good it actually was. Whilst it is easy for us to do this - a computer would have a slightly more difficult time - because it must use mathematical formulas to work to the same conclusion.
This is essentially what a credit scorecard is. It's a computer program or model which uses all of the data from every consumer in the country to predict the likelihood that that person will repay their debt obligations.
Who Uses A Credit Scorecard?
Credit scorecards are used by banks, financial institutions, and other entities which are interested in lending money - safely. If you understand the difference between scorecards and scores - you're well on the way to improving your financial outlook and future.