The credit score or score gained strength from the 80’s on. Until then, the decision on the concession and the offered credit conditions depended only on of human judgment, based on the so-called name in the square. In other words, creditors used their experience in observing the consumer behavior retrospective when taking credit, to evaluate new consumers. In addition to being subject to failure, this was a slow process, unthinkable today, when countless credit requests are processed per day.
Appearance of the score made this decision faster, more reliable and fair
This is because the score is based on numerous variables and statistical data, involving the analysis of factors related to the consumer credit history, such as paying bills on time, debts. negative results, financial relationship with companies and updated registration data. The score generally ranges from zero to a thousand points. The higher the score, the more power the consumer has to negotiate facilities and select creditors.
The score brings clarity to the relationship
This between those who offer credit and those who ask for credit, since both have access to information. Those who need credit can use a good score as a tool to negotiate better conditions, such as lower interest rates or longer terms. And organizations that work with credit granting, such as banks, financial institutions, commercial establishments, telephone companies and various service providers, can make safer and faster decisions.
In countries like Germany, the United States, France and Italy, the credit score is widely used and its benefits recognized by all involved. In Brazil, the use of the score is still low, but it tends to gain momentum as it starts to be seen as a facilitator of credit grants, with benefits for all parties involved. Last year, credit bureaus started to provide the score to consumers for free, in a fast, simple and practical way through their websites. When registering, the consumer is able to consult if he has past due debts in his name, identify his credit score and have extra help to control his financial life. Do you have any questions about credit scores? We can solve it! Write to us!