How Many Credit Scores are There?

Filed in archive Credit on February 22, 2006

In an interesting report Jeffrey Strain at pfadvice.com talked about a secret hidden way that those seeking your credit score do it more than one way.

While we all know about normal way it is done, evidently there has been another score that they have been keeping tabs on us with. He calls it a "hidden credit score" - your Bankruptcy Risk Score.

Here is how he reports it:"While your credit score is a score assessed to you based to a large extent on your history of obtaining credit and paying off debt, the Bankruptcy Risk Score measures how likely you are to file bankruptcy. The Bankruptcy Risk Score is exclusively for lenders provided by the credit reporting agencies and not available to individual consumers."

"This bankruptcy score is supposedly a complex mix of your credit score plus your spending habits (yes, all that information of how you use your credit card, shopping cards and any other way they can assess what you buy with it is likely factored into this score). The credit agencies and those that use this report (and have contributed to creating it) have been reluctant to reveal exactly how the the model works and what it is based upon because they see it as proprietary information. They spent a lot of time and money developing it and if they explain it, they are giving away part of it's value. Therefore little is said about this report (and why you have never likely heard of it before)."

Eventually there will probably be pressure from the public for the credit bureaus to start revealing what their criteria are for determining how this system, that evidently is affecting our financial capabilities based upon unknown methodology, works and affects us.

Unless there is a public outcry and pressure that begins to be heard, they probably won't feel any need to let us know that it exists or how its existence interacts with our finances.

About the only thing that has leaked out is that this Bankruptcy score works the opposite of the credit score, that's about all we have heard about it.

Yet, in just the little I have heard, the end result has to pretty much be the same. If you're at bankruptcy risk, obviously you would also be a credit risk.
There would be some slight variations, but I can't see how it would be a huge harbinger to worry about, other than the fact that it hasn't been openly acknowledged or revealed.