Experian Addresses "Risk Factors" a/k/a Denial Cod

David A. Szwak

Experian Addresses "Risk Factors" a/k/a Denial Cod

Postby David A. Szwak » Sun Dec 18, 2005 7:57 pm

http://www.experian.com/ask_max/risk_scores.html

That's where risk factors come in.

Risk factors: helping you get control
The risk factors are all-important. They tell you what from your credit history most influenced a risk score produced by a particular model and are generated every time a risk score is calculated. Understanding the risk factors gives you control over your creditworthiness and, therefore, the risk score – no matter what risk score model is used.

Unlike the numbers, the factors tend to be relatively consistent from risk model to risk model. That's because the things that make you creditworthy – or not – are pretty much the same regardless of how they are measured.

Risk factors are listed in order of importance
Keep in mind, the risk factors usually are listed in order of importance. Inquiries almost always are listed last, or very nearly last, as in your situation.

Inquiries indicate you may have additional debt not yet included in your credit history. If you already are a marginal credit risk, that unseen debt can push you over the edge.

The models have to list three or four factors. When you are a good credit risk, inquiries likely are listed because they are the only thing left.

Risk factors aren't good or bad (They just sound mean)
Another very important thing to understand about risk score factors is that they are neither good nor bad (although they usually sound pretty negative). The risk factors simply indicate the things that most influence the particular risk score at the moment it was calculated.

As I mentioned earlier, risk factors are generated every time a risk score is calculated. So even if you were a perfect credit risk (no one is), a list of three or four factors would be generated, telling you what from your credit history most influenced the score at that moment.

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