Com/156

Com/156

For Score and The Lenders Use of Gold
Credit Scores benefit both lenders and their customers. The lenders aid their customers by advancing them their “gold” for various reasons, but who helps the lenders when the customer runs away with the gold? What will keep these customers from repeating this action again? Banks have people asking them for different amounts of money every day, but the bank and the customer are not too familiar with each other. Clearly there is a need for a system that will tell the lenders whether or not a potential customer is a potential risk. Can you imagine a world without a system like this? Lenders would not be able to expand their business of helping people because of the black holes the lenders would be throwing their wealth into. If a bank decided to try to save their business they would have to raise interest rates and fees associated with each deal. This means each customer would suffer for the deeds of the bad customers. The credit score helps stop this act by the credit industries, by making sure these bad customers do not receive the chance to run off with said “gold”.
The credit score comes from the respective lenders working together to create a single number. This number will tell each of the lenders the trustworthiness of each customer. Knowing that the number is backed by several years of financial (among other) dealings about the customer helps the lenders trust the final score. Each time the customer takes out a loan it is reported. If the client does not pay anything back on the loan, or misses payments, this too is recorded. This allows the lending industry to determine who they can and cannot trust by putting all of these recorded instances together comparing the good and the bad by leveling the marks against each other to contribute to this overall score. This score usually measures somewhere between 300 and 900. Just like in video games the higher number is the one you want most. If you have a high credit score,...

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