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Credit

What you need to know about credit scoring.

What is credit scoring?
The use of s statistical model to objectively evaluate all the credit information available in a single Repository (Bureau)
It weighs and balances varying pieces of information more quickly and precisely that an underwriter, to better assess risk for repayment of debt.
Different Scoring Models reside within each Repository's Software. (Which version are you using?)
It uses Credit Repository information to significantly increase the level of predictive power to determine Good payers from Bad payers.
Credit Scoring is not Underwriting - it's Risk Assessment!

Notes:
Bureau Scores - sometimes referred to as FICO scores, are calculated by a system of scorecards, developed for each repository.
The three different models are often referred to as "FICO" scores.
The scoring models reside within the software of the three credit repositories and are called:
- Beacon, at Equifax 3 versions on the street (version 96) 1998 release
- Emperica, at Trans Union 2 versions on the street (verison 98)
- FICO, at Experian 2 versions on the street (FICO2)
In developing these scorecards, Fair Isaac, uses credit data on millions of consumers, and applies complex mathematical methods to perform extensive research into credit patterns that forecast repayment performance.
Through this process Fair Isaac identified distinctive credit patterns. Each pattern corresponds to a likelihood that a consumer will make his or her loan payments as agreed in the future.
Fair Isaac observed a very large number of credit report histories of mortgage borrowers to determine which credit report items or a combination of these items are the most predictive of risk.
Any information not presnt in a repository credit file is not used by the scoring model in creating a Credit Bureau score.

What is a Credit Bureau Score?
A highly specialized risk assessment based on the information supplied solely within a single credit repository.
Experian, Transunion, or Equifax
A "Snapshot" of a consumer's credit profile at the particular point in time that a credit report is obtained from a repository.
A Summation of Risk of repayment of debt by a consumer based on the Repository's credit profile as ranked against all other consumers with credit.

There is no charge for a consultation.

Sincerely,
PHH Mortgage
Mark Glouner 661 406-5629