credit scoring

Credit scoring

A statistical technique that combines several financial characteristics to form a single score to represent a customer's creditworthiness.

Credit Score

A measure of an individual's creditworthiness. Credit scoring involves the quantification of a variety of factors in an individual's background, including a history of default, the current amount of debt, and the length of time that the individual has made purchases on credit. Banks and other financial institutions may use a credit score to determine whether or not an individual is likely to default on a loan, mortgage, or other debt. The FICO score is the most common credit score in the United States.

credit scoring


credit scoring

The process of rating potential borrowers based on their overall credit history, current debts, and frequency of application for credit.The most commonly used score, by far, is the FICO score.

References in periodicals archive ?
Ever since the system of credit scoring and credit reporting came into play, consumers can start to understand what their level of personal debt is, how much credit they have accessed already and how much credit they could potentially access.
based consumer data firm whose VantageScores work in cooperation with the consumer credit scoring systems developed by Experian, TransUnion and Equifax.
In fact, there are hundreds of credit scoring systems used by lenders.
The study finds that millennials (those between the ages of 18 and 34) know less about credit scoring than older credit card holders.
The first models of credit scoring were developed by the Fair Isaac Corporation more than 50 years ago.
The ruling could lead to the state allowing insurers to use credit scoring to calculate car and home insurance premium discounts.
2, 2008, legislative sunset of Florida's public records exemption for credit scoring methodologies and related trade secret information, some insurers may have reason to be uneasy.
As a cost-saving technology, credit scoring has greatly affected consumer credit markets by allowing creditors to gauge credit risk more inexpensively and readily and expand their reach to consumers beyond the limits of their local offices.
The Fed study, Report to the Congress on Credit Scoring and Its Effects on the Availability and Affordability of Credit, researched credit-bureau records and demographic data from more than 300,000 individuals.
Credit scoring systems that automate the underwriting of non-traditional credit files are available today but not widely used across the industry.
Credit scoring is that, a very important measurement tool," says David Snyder, assistant general counsel with the American Insurance Association in Washington, D.