Credit Risk

Creditors look for ways to help them predict the future behavior of borrowers. They want to minimize their financial risk. Each creditor decides how much credit risk it can afford. Creditors and lenders use computers to measure credit risk.

Creditors evaluate credit risk using a tool called a credit score. Information from your credit report is used as the basis for your credit score.

Your credit score is a computer-generated number. The number predicts how likely it is that you will repay future debt.

The computer summarizes your credit profile and compares it to other profiles to calculate your credit score.

Your credit score takes several factors into consideration, such as payment history and number of credit accounts. Various credit scoring companies use different factors.

You'll learn more about credit risk and credit scores in the Understanding Credit Scoring section


Thinking like a lender

 

    Fannie Mae
    Freddie Mac
   
Ginnie Mae
   
VA
   
FTC
   
FDIC
   
FRB
   
HUD
   
Complaints

 

Discussion Forum

Recent Posts -

 


By visiting Allie Mae you have taken your first step toward becoming an educated borrower. Allie Mae is an objective, independent source of information for the mortgage consumer. Whether you are buying a home, refinancing, taking a home equity loan, building a home or in need of a mortgage for any purpose, Allie Mae is here to help. Allie Mae has helped thousands of people with their mortgage needs. We have a complete selection of articles, charts, calculators, and checklists designed to help you through the mortgage and home buying process.

© 2004 Copyright AllieMae. All Rights Reserved.
Privacy Policy   Legal  Terms & Conditions   Webmaster   Site Map    Application
About   Contact Us   Forum   Dictionary   Calculators   Articles   Free Content