| Most
people never even see their credit score.
Credit scoring industry pioneer Fair, Isaac and Co. provides this
peek of how someone with good credit and someone with bad credit
might be treated under its system. While the company was willing
to run the calculations for Bankrate.com (sm), it was not willing
to share information about those calculations.
|
Example
1: Low/average-risk person with good credit score
(Date of report: 7-15-96) |
|
This
profile presents a certain degree of risk for the lender.
First, the payment history raises some concerns due to the
collection item and serious delinquency on the second bank
card. Because these items are a few years old, they do not
raise the level of risk of concern as much as they would
if they had occurred recently, but they do affect the score.
The balances outstanding also represent a certain level
of risk. Although only a fairly small portion of the available
credit has been used, it is still higher than optimal. However,
the long file history and lack of recent inquiries or credit
line openings are positive indicators. This profile would
probably represent an acceptable risk level to most credit
grantors. |
| Type
of loan |
Date
reported |
Date
opened |
High
credit |
Balance |
Current
rating |
Historical
delinquency |
| Bank
card |
6-96 |
3-85 |
$5,000 |
$1,500 |
Current |
None |
| Auto
loan |
6-96 |
7-92 |
$8,000 |
$2,000 |
Current |
None |
| Retail |
5-96 |
9-87 |
$
300 |
$0 |
Current |
None |
| Retail |
3-96 |
6-88 |
$1,000 |
$0 |
Current |
None |
| Bank
card |
5-94 |
11-84 |
$3,000 |
$0 |
Current |
120+
4 years ago |
|
Inquiries:
None |
|
Public record/Collection
items: 1 collection item, 4 years ago, for $500 |
|
CREDIT
SCORE: 706 |
|
Example
2: High-risk person with poor credit score
(Date of report: 7-15-96) |
|
Most
lenders would agree that this profile represents a high
level of risk. First, one of the bank cards was delinquent
the last time it was reported. Although the delinquency
is minor -- only a 30-day rating -- it points to potential
risk, given that the file history is quite short. The ratio
of balances to high credit is also indicative of significant
risk. The balances are quite large relative to their high
credit amounts and the amount of time the accounts have
been open. Also telling is the fact that all trade lines
have balances. This profile, along with the short file history,
strongly contributes to the high-risk ranking. |
| Type
of loan |
Date
reported |
Date
opened |
High
credit |
Balance
|
Current
rating |
Historical
delinquency |
| Bank
card |
6-96 |
10-95 |
$3,000 |
$2,700 |
30
days |
None |
| Retail |
5-96 |
11-95 |
$
750 |
$
300 |
Current |
None |
| Bank
card |
5-96 |
2-96 |
$1,500 |
$1,600 |
Current |
None |
| Retail |
3-96 |
1-94 |
$
500 |
$
450 |
Current |
None |
|
Inquiries:
Bank: 7-1-96; Retail: 6-13-96; Bank: 2-7-96; Retail: 11-2-95;
Bank: 3-23-95 |
|
Public record/Collection
items: None |
|
CREDIT
SCORE: 585 |
|
