Every month in The Score, VantageScore Solutions includes a column for consumers that singles out a particular fact, misconception or nuance about credit scoring, help everyone better manage their credit accounts. Here are a few of our favorites from 2013:
Did you know how lenders set interest rates?
Risk-based pricing is a practice whereby a lender offers better deals to borrowers who pose less risk of defaulting. This is why consumers with higher credit scores are generally awarded lower interest rates, higher loan amounts and higher credit limits. Read the full article here.
Did you know well-handled credit accounts means more than having the right number of accounts?
One of the most common questions consumers ask is about the number of accounts that should be kept on credit reports in order to earn great credit scores. While the attention paid to the “quantity” is to be expected, thankfully it is largely unnecessary. Credit scores tend to focus on your credit-management methods — your “quality” rather than your quantity. Read the full article here.
Did you know many lenders use more than one score to assess credit risk?
It’s true that consumers’ credit scores are a key component to the lender’s decision-making process, but it might surprise you to learn that many lenders use multiple credit scores to provide a more refined assessment of risk. Read the full article here.
These and eight other “Did You Know” columns from 2013 are available in The Score’s archives. Read them all here and also take a moment to review the other consumer resources on YourVantageScore.com.