What's your score

Black Enterprise, August, 1998 by Donald Jay Korn

RISKY BUSINESS

Here's an example of credit scoring in action. Consumer A poses a low-to-average level of risk; his credit score is 706. Consumer B poses a high level of risk and scores only 585.

                Credit   Balance   Current       Historical
                Limit              Rating        Delinquency

Credit Card     S5,000   $1,500    Current
Credit Card     3,000        0     Current   120 days, 4 years ago
Retailer        300          0     Current
Retailer        1,000        0     Current
Auto Loan       8,000    2,000     Current

Dates opened. Credit cards are both 11 years old; retail cards are both eight years old; and the auto loan is four years old

Recent credit inquiries: None Public record/collection items: One collection item, four years ago, for @500

CONSUMER B Score: 585

                Credit       Balance    Current        Historical
                Limit                   Rating         Delinquency

Credit Card     $3,000      $2,700      30 days late
Credit Card      1,500       1,600      Current
Retailer           750         300      Current
Retailer           500         450      Current

Dates opened: One retail credit card is two years old; all others have been opened within the post year

Public credit inquiries: Five within the last 18 months, including three in the lost six months

Public record/collection items: None