To develop a model, a creditor selects a random sample of its customers, or a sample of similar customers if their sample is not large enough, and analyzes it statistically to identify characteristics that relate to creditworthiness. Then, each of these factors is assigned a weight based on how strong a predictor it is of who would be a good credit risk. Each creditor may use its own credit scoring model, different scoring models for different types of credit, or a generic model developed by a credit scoring company.
Under the Equal Credit Opportunity Act, a credit scoring system may not use certain characteristics like -- race, sex, marital status, national origin, or religion -- as factors. However, creditors are allowed to use age in properly designed scoring systems. But any scoring system that includes age must give equal treatment to elderly applicants.
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Company NMLS: #63201, 3363, 9133, 4975274
http://www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/63201
365 118th Ave SE #200
BELLEVUE, Washington 98005
Phone: (425) 460-2480
amy@homelinkmtg.com
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