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.
The NextGen Flop - A Credit Score Failure
Credit rating agencies are always looking for ways to improve the processes by which they calculate credit scores for the general public. Usually, this is done by a simple adaption of the current model. For example, the FICO credit score modelling system has undergone regular changes since its inception many years ago.
Given the importance of the FICO score - most people were excited when it was revealed that the same company which developed that system was working on something even more revolutionary:
- "NextGen" Credit Scoring Model
The company marketed this new system as being a true revolution in the way that credit scores were calculated - with an increased emphasis on the following factors:
- Equity and fairness.
- Projected financial future rather than actual financial history.
- Weighting to loans of greater importance - i.e. mortgages.
Clearly, the people who were most excited about this were consumers - who would finally get a credit score which reflected their actual ability to pay off debts in the future, rather than the sever weighting that was put on past transactions and loans by the current FICO system.
The Launch of NextGen Credit Scores
Unfortunately, the launch of the NextGen credit scoring system was a severe disappointment to all of those people who had been expecting something different and exciting. Instead of providing a system which boasted fairness and challenged consumers to improve their financial outlooks - the system failed to show enough of a difference to the current FICO system to be worth bothering with.
Unfortunately for the developing company, banks and financial institutions also turned their heads away from the system - with reports that the scores were far too difficult to interpret, and ultimately not worth the bother when the FICO system was already in place and performing well.
The Future of Credit Scores
The NextGen example is only one case where a new credit scoring system was developed, implemented, and abandoned. It certainly begs the question - will there be more in the future?
Interestingly, there are actually relatively few new systems in the works - leaving consumers to work on their FICO score in the meantime to ensure that their future of credit availability is adequate for their lifestyle.
If a new system worth noting does come along - you can be sure that we will fill you in with plenty of time to spare.