Just when most people finish with school and can stop worrying about test scores, there’s a new kind of scoring that enters picture. It’s called credit scoring. And, its impact on your financial future can mean more to you than a college degree.

You may never know your precise credit score, but you need to know if you’re at risk! Credit Scoring ... Why It’s So Important: Ever wonder how a creditor decides whether to grant you credit? For years, creditors have been using credit scoring systems to determine if you’d be a good risk for credit cards and auto loans. More recently, credit scoring has been used to help creditors evaluate your ability to repay home mortgage loans.

Precisely what is credit scoring?

Credit scoring is a system creditors use to help determine whether to give you credit. Information about you and your credit experiences, such as bill-paying history, number and type of accounts you have, late payments, collection actions, outstanding debt, and age of your accounts is collected from credit applications and your credit report.

Using a statistical program, creditors compare this information to credit performance of consumers with similar profiles. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. Total number of points (credit score) helps predict how creditworthy you are; how likely it is that you will repay a loan and make payments when due.

You may never know your precise credit score, but you need to know if you’re at risk!

Why is credit scoring used?

Credit scoring is based on real data and statistics, so it usually is more reliable than subjective or judgmental methods. It treats all applications objectively. Judgmental methods typically rely on criteria that are not systematically tested and can vary when applied by different individuals. 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. How reliable is credit scoring system?

Credit scoring systems enable creditors to evaluate millions of applicants consistently and impartially on many different characteristics. But to be statistically valid, credit scoring systems must be based on a big enough sample. Remember that these systems generally very from creditor to creditor. Although you may think such a system is arbitrary or impersonal, it can help make decisions faster, more accurately, and more impartially than individuals when it is properly designed.

In fact, many creditors design their systems so that, in marginal cases, applicants whose scores are not high enough to pass easily, or are low enough to fail absolutely are referred to a credit manager who decides whether company or lender will extend credit. This may allow for discussion and negotiation between credit manager and consumer. What happens if you are denied credit or don’t get terms you want?

For answer to that crucial question and how to improve your credit score, be sure to read Part II of “Like It Or Not, You Have A Score To Settle.”

Credit and You are a group of expert on credit and authors of “CREDIT AND YOU ... Secrets To Improving Your Credit Rating.” Feel free to pass this article along to family and friends. And be sure to pick up your FREE 7 day course on “Credit Basics” at http://www.creditandyou.com

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Like It Or Not, You Have A Score To Settle! (Part 2 of 2 on Credit Scoring) by Credit and You.com

In part 1, we covered basics about credit scoring – what it is and how it is calculated. It’s time to address critical question ...

What happens if you are denied credit or don’t get terms you want?

The Equal Credit Opportunity Act requires that creditor give you a notice either with specific reasons your application was rejected, or stating that you have right to learn reasons if you ask within 60 days.

In writing inspirational romances, it wasn’t long until I ran into question of anticipated bedroom scene. Being Christian myself and having seen consequences of traveling down both paths of chastity and promiscuity, I knew I didn’t want to promote anything that would degrade spirits of either my characters or my readers.

Thus I knew that any pre-wedding bedroom scenes were not an option for me. So, what was left? That was big question, and it forced me to look at what feels romantic to me—sans bedroom scene. That’s when I realized how important four most romantic gestures are to women. It is through these gestures that we feel acknowledged, heard, and ultimately loved.

The first of these is simply holding hands. This gesture tells a woman that she has an ally in this world—that she’s not in this alone. It is precursor to a warm body lying next to hers at night, and for a married woman, it can literally be a precursor to a warm body next to hers at night. This act exudes safety, and therefore is romantic in-and-of itself. I witnessed awesome message of this simple gesture at my own wedding when my parents, 28-years-married, walked up to light their side of unity candle hand-in-hand. It wasn’t planned. It was just their natural way of communicating they were there for each other no matter what.

A second truly romantic gesture is that of hugging or holding each other. I’m sure you’ve seen them—those people who are newly in love. They are in each other’s arms at every opportunity. Their hugs are often not intense, “I want you right now” types. More often they are simply, “I’m really glad you’re here and I want to be close to you” gestures. The feeling of being protected while simultaneously protecting is as primal as need for food and shelter.