Bad Credit

A negative credit rating is often considered undesirable to lenders and other extenders of credit for the purposes of loaning money or capital.A consumer or business' credit history is regularly tracked by credit rating agencies. The data reported by these agencies is primarily provided to them by creditors and includes detailed records of the relationship a person or business has with the lender. Detailed account information, including payment history, credit limits, high and low balances, and any aggressive actions taken to recover overdue debts, are all reported regularly. This information can be quite detailed and arduous to navigate by a potential lender dealing with a new applicant. To address this issue, credit scoring was invented. All credit bureaus also offer a supplemental service called credit scoring. Credit scoring is the process of using a proprietary mathematical algorithm to create a numerical value that alleges to be a total picture of an applicants creditworthiness. Scores, based on numbers from 350-850 are alleged to statistically analyze a credit history, in comparison to other debtors, and gauge the likelihood of the magnitude of financial risk. Since lending money to a person or company is a risk, credit scoring offers a standardized way for lenders to assess that risk rapidly and "without prejudice." Credit scores allege to assess the likelihood that a borrower will repay a loan or other credit obligation. 

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