The following is a list of quick tips on credit scoring:
Payment History: Credit scoring considers whether the borrower's payments are satisfactory, delinquent or derogatory. Late payments have the highest impact on your borrower's credit score.
Utilization: The percentage of the credit that the borrower uses on their accounts, in relationship to the overall availabe credit balances is an indicator of credit risk.
Balances: The amount of recently reported balances, both current and delinquent, also, balances that have increased recently can be an indicator of credit risk.
Depth of Credit: The length of the borrower's credit history and the types of credit provides greater insight into how the borrower manages credit. A mixture of various types of credit (e.g. auto loans, installment loans, revolving accounts) can have a positive affect on their credit score.
Recent Credit: The number of recently opened credit accounts and credit inquiries or taking on new debt can be an indicator of credit risk.
Available Credit: Low balances on the borrower's credit is an indicator of good credit management and a low lending risk. High balances on accounts can indicate potential over usage, which can negatively affect the credit score.
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