According to VantageScore, a credit reporting agency, one in every three Americans has a “poor” credit score. This is unfortunate, as a consumer’s financial trustworthiness is based on that three-digit score that is determined by a wide range of decisions you make.
If you’ve ever applied for any type of loan, you probably understand how important a credit score is to your financial health. But how much do you know about where your credit score comes from, or the companies that create them? Knowing these basics will shape your perspective on the wonderful world of credits scores.
Let’s say your client is in the market for a big purchase. They come to you for a loan to buy a house, a car, maybe a boat, or another sizeable item that requires a loan. The first thing you as a lending professional should do to make a determination on a loan request is to evaluate the client’s creditworthiness, which will better inform the client’s chance of repaying their loan.