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 ?
The launch of the Al Etihad Credit Bureau's credit scoring system is another major milestone in the evolution of the financial services industry in the country.
Royce said in a press release, "The GSEs' use of a single credit score is an unfair practice that stifles competition and innovation in credit scoring.
based consumer data firm whose VantageScores work in cooperation with the consumer credit scoring systems developed by Experian, TransUnion and Equifax.
However, Smith and Gilbert (2011) note that during discussions to update the Federal Credit Reporting Act in 2010, some members of Congress manifested doubts about the benefits to consumers of educational or FAKO scores (For more information on comments made by Representative Jackie Speier (D-California) regarding FAKO scores, refer to Smith and Gilbert (2011) What Borrowers Need to Know About Credit Scoring Models and Credit Scores: Hearing Before the Subcommittee on Oversight & Investigations of the H.
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.
In the beginning, when credit scoring first became part of the B2B credit lexicon, it was, in many circles, framed as the harbinger of doom for the traditionally fluid nature of the business.
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.
Credit scoring systems that automate the underwriting of non-traditional credit files are available today but not widely used across the industry.