Good Credit Rating Score | All About Credit Scoring Models
What makes a good credit rating score and what do you need exactly to achieve a high credit score? Keep reading to find out more. You’ll also get a background on the credit scoring model that is used to determing your credit rating score.
Good Credit Rating Score
To undersand your credit rating score, you need to first understand where it comes from. There are three main credit reporting companies or agencies, they are Equifax, Experian, and TransUnion. Please note that these three companies are not government owned and in fact they are private and for-profit companies. These entities all maintain that their credit scoring models are trade secrets and hold it closely just like Coca-Cola does with their secret recipe.
The major three credit bureaus also say that their credit scoring model is regularly tweaked to keep up with the market and do not publicize how. They do this because they do not want people manipulating their credit score to get a good credit rating score. That way there would not be one sure fire way to raise one’s credit score. This explains why there is so much information out there today that claim they have the answer to raise your credit rating score.
On a high level, your credit score depending on how your credit information is reported from a credit grantor. For example, if a bank does not report your use of the credit, then it isn’t considered in your credit score. Another example is that some business lines of credit do not show up on the person’s personal credit at all.
At ReallyFreeCreditScore.com, we have learned of some recent developments in the scoring model on getting a good credit rating score.
• It has been proven that the inquiries that you get are now sent more frequently than before to the three major credit reporting companies. Inquiries will show up instantly now.
• Secured lines of credit such as a HELOC are not as damaging to your credit rating score as they once were.
• Shopping around for mortgage loans no longer hurt your credit score when done in a short time frame. Now multiple loan inquiries are bundled together.
Know that credit scoring modeling can be different on an individual basis. If you hear someone say that credit scoring does not work a certain way because it did not happen to them, it simply does not follow that the experience can translate. Because of how the credit reporting agencies can change their modeling, it can be different for each person trying to get a good credit score rating.