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702. Who assigns my credit rating?




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This article is from the Credit cards and Consumer Credit FAQ, by adams@spss.com (Steve Adams) with numerous contributions by others.

702. Who assigns my credit rating?

You don't have a credit rating, as such. Each credit bureau
collects information from banks, finance companies, department
stores, taxing authorities, landlords, and other "credit grantors"
and keeps the information in your file. The file is supposed to be
an objective record of your credit history, in essence a sorted copy
of information furnished to the credit bureau by companies you have
done business with on credit.

The credit history shows your name, address, Social Security number
and birth date; your open accounts, with balances and credit limits;
whether you pay them on time or not; whether any of them are or were
turned over for collection; any suits, judgments, or tax liens; and
so on. It may also include, according to {Your Credit Rating}, your
employer, position, and income; your former address and former
employer; your spouse's name, SSN, employer, and income; and whether
you rent or own your home.

That's the official story. However, according to the November 1991
{Consumer Reports}, the attorney general of New York State has
charged that TRW maintains a secret numerical scale of (TRW's
opinion of) each consumer's credit worthiness. (I can verify this
because a person who is very close to me and whom I trust completely,
has confirmed it to be true, upon guarantee of anonimity.) Credit
grantors who pay extra (which is 30% of them) see that score besides
the factual information. Consumers are not told their scores, according
to a TRW spokeswoman, "because it wouldn't mean anything to the
consumer." The scale, according to my source, is on a 1 to 1000
rating, where the number represents the pro-mille chance of default.
Seems understandable to me.

Latest reports have TRW dropping this rating, but I have not been able
to confirm this with my previous source.

 

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