![]() In Australia, credit scoring is widely accepted as the primary method of assessing creditworthiness. Digital finance companies such as online lenders also use alternative data sources to calculate the creditworthiness of borrowers. Other organizations, such as mobile phone companies, insurance companies, landlords, and government departments employ the same techniques. Lenders also use credit scores to determine which customers are likely to bring in the most revenue.Ĭredit scoring is not limited to banks. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. A credit score is primarily based on a credit report, information typically sourced from credit bureaus. JSTOR ( February 2011) ( Learn how and when to remove this template message)Ī credit score is a numerical expression based on a level analysis of a person's credit files, to represent the creditworthiness of an individual.Unsourced material may be challenged and removed. Please help improve this article by adding citations to reliable sources. This article needs additional citations for verification. ![]()
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