Credit scoring is the result of various computer programs which, when inputted with information contained in your credit report, generate a number which is your “credit score.”
Depending on the model used these numbers help the lender or creditors assess risk and “predict” the likelihood of a future default on your loan.
Credit scores are an important consideration in approving loan applications.
Credit scores are only a prediction. Yet, because the models have been developed based upon literally hundreds of thousands of credit report profiles, they are considered an excellent predictor of an individual’s ability to successfully repay a loan.
