Credit Scoring System

[SCARFACE]

Here in america they use a Credit scoring system, which ranges from 350 to 900 pts. It determines what APR you qualify for, your eligibility for credit cards, car loans and now it's even considered when you apply for jobs. i was wondering if the same system is used in Europe, Canada and the other parts of the world. if not, what are the alternatives they use?

[stevie21]

Sounds similar to here in the UK although I'm not sure that it's used in the recruitment process.
2 companies here, equifax and experian, store data on your credit history (what credit you have, what you've applied for and if you've missed any payments or defaulted altogether on credit etc) and lending companies generally get as much info from them as they give.
Credit searches are carried out & this returns such basic factual info and from there, it's down to the lender to interpret that and (likely) assign a score. How this is done is very secret but obviously points are awarded for keeping all your payments up to date and deducted for the opposite.

I know that certain companies give different APR's depending on the credit search results but even on a basic level, reasonable amounts of credit aren't often given without a credit search in the first instance.

[Gandy]

Experian use a scoring sytem of between 0 and 1000.  It seems strange however that even with a score of 962 out of a possible 1000, I still get turned down for credit now and again.  For businesses the range is 0-100.

[Crazy78]

I work for one of the Credit Reference Agencies mentioned.  Basically, you have a credit file (containing information on all accounts held, payment history, amount of payments, any CCJs etc), which then produces an overall credit score.  This gives an indication of whether you will be a good candidate for any further credit. The final decision lies with the credit grantor.

[Crazy78]

Also, it is worth mentioning that having a large number of Credit Agreements will not necessarily go against you when applying for further credit, as long as the payments are up-to-date. Lenders want to see how you have operated accounts, so are more likely to lend to someone with 10 well paid accounts, instead of someone with just 2 poorly operated credit accounts. However, also note that any accounts you have open, but do not use (i.e catalogue accounts), will count towards the total amount of credit you have against your name. A lot of lenders look at the total percentage of credit you have, against your income to make a decision.