There are two main credit scoring models that use information acquired by debt collectors to assign a numeric value to your credit risk. In discussions of credit scores, you might have come across the acronyms FICO and VantageScore. While both scores are almost the same, they were calculated in somewhat different ways and are collated by separate organizations. The highest possible score in either system is 850, with the range covering 300-850. Experian, Equifax, and TransUnion are the three main credit data gathering organizations that are used by the Fair Isaac Corporation to compile FICO ratings. VantageScores uses the financial information that these collection agencies already have on hand.

The credit bureaus themselves have never established what constitutes a bad or poor credit score. The only thing these organizations do is compile data from your loan applications at banks. They compile a report that can be understood by you and potential lenders based on information gleaned from your credit card issuers, banks, and public databases. Lenders determine what constitutes a good or bad credit score independently and based on each individual case. The information helps establish the likelihood and timeliness of loan repayment.

Credit ratings are based on a wide variety of data from your financial history, not only your current balances and fees. The following items can be seen in most credit reports:

1. When each account was opened and any prior borrowing activity

2. Multiple credit account types, including both revolving and non-revolving options

3. Debt collection attempts, tax liens, or bankruptcies in the past

4. Neglected or overdue monetary obligations

5. Relative incidence of credit card and loan use

6. A record of lawsuits or other public events that might have an impact on your creditworthiness

7. The sum total of serious questions asked throughout the past three years

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