Credit 101

Credit 101 is Informative Research’s way of providing the fundamental tools to our clients so they can better understand the importance of their consumer’s credit history. Having access to this credit history is vital when our clients are making the majority of their lending decisions. The historic patterns payment along with other credit related events both positive and negative are summarized in an Informative Research credit report. Each report has up to 3 bureau calculated FICO scores which are numeric summaries of the borrower’s credit risk.

Credit risk can affect a consumer when applying for credit terms. The ability to qualify for credit is usually the first step taken by consumers when applying for consumer, car or a mortgage loan. When a consumer applies for a loan the lender scrutinizes (or underwrites) the application to determine the amount to lend, duration of the loan and an interest rate to be offered largely based upon the consumer’s credit risk.

What is a credit score and how is it calculated?

  • A Fair Isaac (FICO) Score can be be generated for anyone with at least one reporting and updating credit tradeline in the last 12 months
  • Reported data from creditor bureaus is used in FICO’s proprietary statistical model to create the score
  • Scores are generated at the precise time the lender requests the credit report
  • The scores can range from 350 (lowest) to 850 (highest)
  • Credit score are as fluid as the underlying data
  • The model factors in all credit related data in a consumers file not just negative data

Credit 101 – It’s important to know that not every credit score is a FICO score.

To find out more about Credit 101 please download one of our resourceful guides or contact our Marketing Department: