Banks do not just rely on FICO score alone to give credit to their customers, everybody knows to get a good rates they evaluate more. Now why would banks in case of subprime borrowers they just rely on FICO score...when i am giving out money i would be extra careful...anyhow all the three consumer bureaus are upgrading the FICO score basically fine tuning:
model will continue to look at the same factors, including consumers' level of credit indebtedness and payment histories, length of credit histories, number of recent credit openings and inquiries, and the type of credit used, to determine scores.
But the new model will more finely slice and dice the information in consumers' credit files to do a better job of separating the "good risks" from the "bad risks," particularly for subprime borrowers; those with "thin," or young, credit files; or consumers who are actively seeking new credit. "Those are the communities that lenders are most interested in" to determine credit risk, says Craig Watts, spokesman for Fair Isaac.
below link you can download PDF version explaining everything about your credit score.
Understanding your credit score
No comments:
Post a Comment