What are the exact formulas/calculations used to make your credit score?

Question

Also, can I sue reporting agencies for liable if they have wrong information. Punitive damages?

Answer 1

Credit score formulas are proprietary information. No one knows the exact method.

If there are errors on your credit report, dispute it with the credit bureau. They will verify with the creditor and get back to you within 45 days.

Here's the FTC info on disputes you might find helpful: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm

Answer 2

1. Unfortunately for your question, the exact formulas for calculating your credit score are closely guarded secrets owned by the credit bureaus. The bureaus do give a ton of information about why people receive the score they do. The biggies are payment behavior(do you pay your bills on time?, have you ever charged off a debt(failed to pay) ), length of credit(how long has it been since you got your first credit card or loan), and total amounts of credit(how much you can borrow) and debt(how much you owe).

2. The incorrect information that the credit bureaus have is most likely due to bad information from one of your lenders, and that lender is liable and subject to fines if they have wronged you. Look up the Consumer Credit Protection Act and the Fair and Accurate Credit Transactions Act but remember your interpretations of these don't really matter, consult a lawyer. You can dispute a bad entry by going to the credit bureau's web sites. They are prompt in their investigations.

Answer 3

The exact calculations are not disclosed to the public, and all three reporting agencies use a different formula. But the biggest factors are; how many accounts with activity, how many accounts with availabel balances over 50% of credit limit, how many delinquint accounts, how long you have been reporting as a consumer, what percent of the balance you send in per month, your available credit, the amount of inquries ( however that has its own calculations because not all inquiries are neg.) , late vs ontime pmts, high credit limits, as well as some minor others.