Credit Scoring

Here are some links regarding credit scoring. These links are courtesy of Jillayne Schlicke at www.ceforward.com. Jillayne is a great real estate instructor and keeps this blog to keep her students and also the general public informed about matters regarding foreclosure and lender law. She familiar with all of the backroom bank operations especially the those regarding “Special Assets”, i.e.  bank owned properties.

The links are below.  Ardell’s post describes that the higher your credit score the more a “deragatory” entry such as a late payment affects your credit. The Washington Post article gives insights how the credit scoring companies regard a short sale or a foreclosure in calculating your credit score.  Recently thet have been feeling the heat to have more openess about the process. It used to be top secret the methodolgy. I am not sure why, an open system gives consumers a much better picture of what is important in their credit and it will give the companies valuable feedback about how their process needs to be adjusted as borrowers and consumers respond. General information like this is great it is not necessary to post the logiryhtmd used to produce the mathematical models that will cause people to game the system and produce unreliable results. Like all mathematical functions that represent themselves as being predictors of human behavior they need to be revised as that behavior behavior can be unpredicatble and often self adjust to the models so as to be useless. Just ask the folks who thought they had it figurd out the with Gaussian copula function.  Below are three links. One to the Washington Post article, one to the RCG comments by Ardell that are instructive and also a link to Wired Magazine article about what happens about when you think you have it al figured out.

Everyone have a great Holiday.

http://www.washingtonpost.com/wp-dyn/content/article/2009/09/10/AR2009091004532.html 

http://raincityguide.com/2009/12/04/how-much-is-your-credit-score-damaged-by/ 

http://www.colorado.edu/AmStudies/lewis/issues/wallkilled.pdf

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