Paid-off loans that are influencing the assessment of the consumer
For many consumers, the Credit bureau as a protection association for lending companies is the famous book with seven seals. Hardly anyone really knows the regulations according to which Credit bureau manages their data perfectly. Who is registered with Credit bureau? And what is the scoring that Credit bureau uses as an instrument to determine the creditworthiness of consumers? In scoring, it is not just current or paid-off loans that are influencing this assessment of the consumer. In the age of credit business, where the retailer’s service delivery no longer runs parallel to consumer payment, scoring is a common method, a consumer not only in terms of his possible unpaid debts to be assessed.
The morality of payment when ordering on account, the correct adherence to installment payments or longer-term payment terms is also very important when scoring consumers. The term scoring is already a big and very important topic in the business world, at least on the dealer side. In scoring, experience gathered with individual consumers with regard to their attitude towards financial obligations is summarized in a relatively objective forecast for the future. The data acquisition is done by computer and the analysis and mathematical-statistical evaluation happens without the manual involvement of people. The goal of the scoring is namely an independent and realistic assessment of the consumer.
Meaningfulness of a consumer rating
The scoring was taken over from the USA in the course of the 1970s and since 1990 mathematicians at Credit bureau have been evaluating consumers with regard to the probability of default. The score value is put together from different criteria, so that different score values can exist for one and the same consumer. A consumer’s score can be very good when it comes to paying bills or paying in installments. As a home buyer, however, this consumer can be classified as a consumer at risk of failure due to his income situation. However, Credit bureau emphasizes that the nationality, family share or average age of the residents have no influence on the scoring assessment with regard to living conditions.
In principle, every consumer should be aware that when a Credit bureau query is made, the scoring values determined are not automatically forwarded by the Credit bureau to the requesting company. The reality is, however, that many companies ask for the meaningfulness of a consumer rating and the score for the corresponding business. The consumer can influence his scoring value by ensuring that invoices are settled promptly and installment payment agreements are always adhered to. If a delay in payment is unavoidable, the best way is to inform the company accordingly in order to avoid a negative report to Credit bureau.