Your Bankruptcy Risk Score
What Your Creditors Don't Want You to Know
Why is that?
Doesn't it seem a bit devious?
There is a scoring method that has been around for over twenty years that has absolutely nothing to do with your FICO score that merchants and retailers use on a regular basis and that is the Bankruptcy Risk Score. Unlike credit scores, bankruptcy risk scores are not sold to consumers by any of the credit bureaus. Consequentially, individuals have little or no way of knowing what their bankruptcy risk scores are or how to adjust them downward.
This is also referred to as "debt analysis" which allows lenders the ability to assess a customers risk in taking out a line of credit. This score is supposedly a complex mix of your credit score plus your spending habits such as information of how you use your credit card, shopping cards and any other way they can assess what you buy. The credit agencies and those that have contributed to creating it have been reluctant to reveal exactly how the model works and what it is based upon because they see it as proprietary information. They spent a lot of time and money developing it and if they explain it, they are giving away part of its value. Therefore little is said about this report which is why you have likely never heard of it before. Out of 10 credit card holders I have asked, not one knew of this scoring method.
The Bankruptcy Scoring Model calculates a consumer's bankruptcy risk score by comparing their credit report characteristics with the characteristics of the credit scoring model. A specific point value is associated with each characteristic. The total of these points is the consumer's bankruptcy score. Bankruptcy scores range from -200 to 2018, with most ranging between 0 - 1000. Higher scores indicate greater likelihood of bankruptcy.
Bankruptcy scores utilize this inverted scale to measure bankruptcy risk where low scores are an indicator of low bankruptcy risk (good) and high scores are an indicator of high bankruptcy risk.
Published by Fed Up American
The dark underbelly of America contains numerous warts, boils, and cancerous tumors, inflicted by that loathsome grimoire of madness that the elected leaders of our nation have become. Well, I'm Fed Up an... View profile
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- The credit agencies have been reluctant to reveal calculation methods
- Unlike credit scores, bankruptcy risk scores are not sold to consumers
- Bankruptcy risk scores range from -200 to 2018
2 Comments
Post a CommentEquifax, Trans Union and Experian have been giving false information about consumers for decades. It's time to dissolve them as companies.
This article is partly incorrect. Equifax's bankruptcy scores are actually better when they're higher, and range between 0 and 600. E.g, 500 is a much better score than 150.