Credit scores are calculated using statistical models meant to predict future behavior in relation to credit and finances. A number of things factor into determining your score. These include the number and severity of late payments, your total amount of debt, the number of accounts you have, what type of open accounts you have and how long they have been open.
While your age, income and employment history are not factored into your overall
credit report score, they may still be considered by a lender when deciding to approve you or not. Also, there are two types of credit scores.
The first is the generic score. This is arrived at with a standard statistical model used by the major credit reporting bureaus Experian, Equifax and TransUnion. Some lenders will use this number, while others will go a different route.
The custom credit score is one that is arrived at using the lenders own statistical model, in which they determine how much weight is placed on certain factors that are more important to them. Whichever model is used to determine a credit score, the lender is required to provide you with the reasons for not approving you if you are denied.
