Are credit scores fair?
 Credit scores can work for you, or they can work against you. In other
words, compared to pure human judgement, you'll do better in some cases, and
worse in others.
The key argument in favor of credit scores are that they are objective.
You fate is less likely to be determined by the prejudices of a particular
credit manager. The scores provided by Experian,
Equifax, and Trans
Union are backed up by statistics, and on the grand scale, they are
predictive of how well consumers will pay their debts.
But, on the individual level, there are arguments for using subjective
factors. Perhaps you had an illness three years ago, and that was the reason you
got behind on payments. A credit
score doesn't take that into account. It only knows that you were
delinquent.
The ability to automate the credit decision process makes it possible to
offer you instant credit or instant approval for a credit card. Many would argue
that the growth of credit has been very good for the modern US economy.
Click here to order your credit
report, credit score, and a detailed explanation of your score.
It is normally available in a matter of seconds.
Credit Scores for People with no credit
For people with no credit history, or no recent credit history, no score can
be computed. If you fall into one of these categories, it will be necessary for
you to establish credit, or start using some of your inactive accounts.
How do you establish credit if you have no credit?
One way to establish credit is to get a secured credit card. You make
a deposit that’s usually equal to or greater than your credit limit. Use
the card and make your payments on time for several months to establish a track
record.
| Note: Shop around for terms and rates on secured
credit cards. They are not all the same. Deal only with reputable lenders,
read the fine print, compare interest rates and question any unusual fees. |
New score types are being developed that rate you in the absence of credit
information, and these present a source of some hope for people without a credit
history. An example is Experian's Cross View, which lets credit
grantors evaluate consumers based on debit activity, such as handling of
a checking account.
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