Page 9 - increase your credit score

He asks you a few questions about your work, your income and any outstanding debts.

While he can get the income and debt information from you, he’ll have to learn from
other people about your trustworthiness and reputation.

After you leave the bank, he takes a walk over to the grocery store and talks with the

manager there. She tells him you don’t have any lines of credit and you seem like a
responsible person.

The bank president then talks with a friend who loaned you money a few months ago.

Over the next week, he gathers information and takes notes, even tearing out notices from
the newspaper that include you – marriage notices, divorce notices, philanthropy, etc.

Once he feels like he has enough information about you, he decides based on your

financial situation and your reputation with local businesses and other lenders.

The Era of Credit Bureaus

A lot has changed since the old days. Credit files went from individual businesses to local
bureaus who oversaw credit files. From there, national credit bureaus formed and laid the

groundwork for today’s credit scoring systems.

Today’s big-three bureaus – Experian, Equifax and TransUnion – gather up hundreds
of bits of information and run them through scoring models provided by the Fair Isaac

Corporation (FICO) or VantageScore, a scoring model the three bureaus created.

These models generate your score, but, when it comes to lending, your score is just part of
what lenders look at. They also read through your credit history.

So, while today’s credit bureaus may use heady mathematics to calculate scores, they still
compile credit history like the lenders of old.

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