Credit Scores: are they fair to people who have earned good credit ratings?

Credit Scores: are they fair to people who have earned good credit ratings?

There are many issues with credit scoring. Some of them are reasonable and accurate measurements of an individual’s credit risk, while some are unfair and inaccurate. Apparently that does not matter to lawmakers and the credit industry who make-up the rules together.

Judge for yourself. Below are some of the pre-determined pros and cons, positives and negatives that may determine a person’s overall credit score:

SCORE FACTORS THAT ARE POSITIVELY AFFECTING YOUR SCORE

Listed below are the top factors that raised your score. They are listed in order of importance.

You have paid your bills on time and currently do not have any overdue accounts or derogatory information, such as a collection, charge-off, or bankruptcy, on your report.

You have at least 2 or more open major credit cards, such as Discover, American Express, VISA, or MasterCard, on your credit report. This often tells lenders that you are a responsible borrower and they may be more likely to see you as a good credit risk and extend you credit.

Your credit file shows no record of any current delinquencies on real estate accounts, such as a mortgage. Having real estate accounts in good standing is viewed positively by lenders.

Your credit report does not contain negative public records, such as a bankruptcy, lien, lawsuit or judgment filed within the last two years. This is having a positive impact on your credit score. Public record items may remain on your credit report for 7 to 15 years, depending on the item.

SCORE FACTORS THAT ARE NEGATIVELY AFFECTING YOUR SCORE

Listed below are the top factors that lowered your score. They are listed in order of importance.

Each time a potential lender or landlord pulls your credit report for review, an inquiry is placed on your file. Inquiries stay on your credit report for up to 2 years. Having several inquiries on your credit report is negatively affecting your score. They are not necessarily negative information, but too many inquiries may indicate to lenders that you are trying to take on more new debt or possibly overextending yourself.

At least 1 or more of your accounts has a balance that is close to your credit limit, which may be lowering your score. When your balance is high, this can indicate to lenders that you are likely to overextend yourself.

So, what do you think? Fair or unfair?