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Credit Rating?
Ok, I'll bet no one can answer this...
What is the actual mathematical equation used to determine one's credit rating?
I don't want a "list of contributing factors" or someone's idea oh how I can work to improve my credit. I want to know exactly how the credit bureaus arrive at what is seemingly a completely arbitrarily set value.
How can one check to be certain your credit rating is correct? YOU CAN'T! No one can tell me HOW they arrive at the precise rating number on your credit report.
Anyone know?
Anyone?!?
4 Answers
- ?Lv 71 decade agoFavorite Answer
Only FICO and they are not talking.
Source(s): Finance Manager for over 8-years. - Sarah MLv 41 decade ago
There is only one score that matters - the true official score is your FICO score.
The FICO formula is NOT a secret. It ranges from 300 to 850 and is calculated based on a 100 point system that covers the five areas of most concern to lenders:
1. Payment history = 35%
2. Amounts owed = 30%
3. Length of credit history = 15%
4. New credit = 10%
5. types of credit used = 10%
As you can see, the two most important factors are first, pay on time, and second, keep a low credit credit to debt ratio. Ideally you should only use 35% or less of the total credit available to you.
Of the credit bureaus, the Experian score is usually closest to your actual FICO score.
See this page on the average American FICO score for more details: http://www.credit-cards-comparisons.com/average-am...
Source(s): http://www.credit-cards-comparisons.com/ - 1 decade ago
Pure undiluted mystery.
My credit score dropped last month by 20 points - and I didn't do anything, didn't buy anything, didn't charge anything.... it's crazy.
More frightening is that banks rely on these FICO numbers as though they are a universal truth concerning our creditworthiness.
It's scary man.....
- Anonymous1 decade ago
This site has really helped me out with my credit. If you have any problems, I highly suggest you use it. It can definitely help you. http://2biturl.com/17b .
