Credit Score System?

Question

I want to know how does the credit score system works, How does the credit companies collect information and rate my credit score , Is there any books or webpages that explains the system in dept? I want to learn as much as possible . Thank you

Answer 1

Payment history - 35%

Amounts owed - 30%

Length of credit history - 15%

New credit - 10%

Types of credit used - 10%

No one knows the exact algorithms but FICO scores use a model which assigns a FICO score from 300-850 based on the above criteria.

Answer 2

The credit bureaus get information that is supplied by your creditors and by you (on your loan applications).

The people who design the systems are mathematicians who have a pool of reports of people from a couple of years ago.  Those who paid off are good credit risks and put in one pool and the ones who turned into deadbeats went into a different pool of problems.  They look for correlations.  Things that the good reports have in common get positive points.  Things that the bad reports have in common get negative points.

This is a simplification, but basically, the more your report looks like the average good borrower, the higher your score.  The more your report looks like the average deadbeat, the lower your score.

Answer 3

try gofreecredit http://hubpages.com/hub/Free-Credit-Repo... maybe help you