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.
Company NMLS: 2540
CO: 2540 ● CT: MB-2540 ● FL: MBR2409
GA: 2540 ● MA: MB-2540 ● SC: 2540
201 S Biscayne Blvd 28th Floor
Miami, FL 33131
Phone: (800) 649-2420
MA- AS A BROKER, WE DO NOT MAKE, BUT ARRANGE LOANS
CT- MORTGAGE BROKER ONLY, NOT A MORTGAGE LENDER OR A MORTGAGE CORRESPONDENT LENDER