how is credit rating calculated by banks?

Answer 1

According to Fair Isaac's this is what I have found...

Factors used to score you, in order of importance (information marked with a * is obtained from an application, not considered in a credit bureau score):

1) Major derogatory items on your report (bankruptcy, collections, foreclosure, slowpays)
2) Time at present job
3) Occupation (Professionals are given heavy weight)*
4) Time at present address
5) Ratio of balances to available credit lines (the lower the better)
6) Are you a homeowner? (if you are, this is heavily weighted)*
7) Number of recent inquiries
8) Age (50+ is the best)
9) Number of credit lines on your report
10) Years you have had a credit in the credit bureau database

According to the above scoring model, to get the highest score, you would have to: a) be at your job for a long time, b) be in a a professional occupation (like lawyer, doctor, banker, corporate officer, etc. - does webmaster count?), c) have lived in the same home (that you own, of course) for over 10 years, d) have had credit and loans for many years, e) be at least 50 years old, f) have almost no debt, g)and not have applied for any new loans for the last two years. Oh yeah, and h) have perfect credit

Answer 2

It is based on your credit score. Credit is pulled from 3 sources, TransUnion, Equafax, and Experian. They give you a credit rating that is a number. Each level equals a certain credit risk. The higher the number you have, the better and the better you get on a credit rate such as for a car or home....

Answer 3

By pulling your credits report and score from 3 major credit report companies: TransUnion, Equafax, and Experian. Note: those reports are not always correct. Obtain your annual free report from them. Scan through for any incorrect items, call them back to have them correct it.

Answer 4

a complicated formula using all factors