Understanding your credit score

Credit scoring is a system creditors use to help determine whether to give credit. Information about the consumer and their credit experiences, such as bill-paying history, the number and type of accounts, late payments, collection actions, outstanding debt, and the age of credit accounts, is collected from a credit application and credit report.

Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles.

A total number of points – a credit score – helps predict how likely it is that the borrower will repay a loan and make the payments when due.
How is a credit-scoring model developed?

A random sample of similar customers is analyzed to statistically identify characteristics that relate to creditworthiness.

Then, each of these factors is assigned a weight based on how strong a predictor it is of who would be a good credit risk.

The following table illustrates the five main categories of information that one scoring model, developed by the Fair Isaac Corporation, uses in most situations.

FICO scores range from about 300 to 850. A FICO credit score above 650 will help to qualify for most loans.

A person’s credit score cannot be evaluated or based on any of the following factors.

• Race
• Color
• Where you live
• Gender
• Age
• Income level
• Country of national origin
• Sources of income
• Religion
• Marital status
• Child/family support obligations
• Down payment information
• Savings
• Length of time in present house

Learn more about how to repair credit and how to protect you and your clients from identity theft by joining Larson Educational Services for Credit, Fraud and Identity Theft taught by Lynne Lovern, plus get 4 CE Credits if you hold a Florida real estate license.


Date: Friday, August 13, 2010
Time: 1:00pm – 5:00pm
Royal Palm Square
1400 Colonial Blvd, Suite 44
Fort Myers, FL 33907
Tuition: $28

Date: Friday, September 10, 2010
Time: 1:00pm – 5:00pm
Horseshoe Park of Commerce
3073 Horseshoe Dr S, Suite 114
Naples, FL 34104
Tuition: $28

Register by calling (239) 344-7510
CLICK HERE to register online


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