The process of lending is no longer personal. For reasons of labor costs and statistical consistency, automation and standardization now dominate the financial industry, insulting the dignity of countless consumers and exposing thousands of creditors to unnecessary opportunity costs. Over the past several years, the personalized aspects of credit assessment that allowed lenders to consider borrowers on an individual basis have been minimized.
Every day, lending opportunities are missed due to inaccurate credit reporting and weaknesses in the scoring models used for consumer and business credit. The most important metric used in credit assessment is the FICO score. The Fair Isaac Company, inventor of the FICO score, promotes these automated, standardized scores as the pinnacle of mathematical risk analysis, but our researchers would be more likely to describe this lofty peak as a molehill.
For example, Fair Isaac appears to assign the same value to the ratio of debt to available credit on corporate credit cards as it assigns to individual cards. Those $25,000 in charges that you spent for your company’s trade-show booth can have the same impact on your FICO score as if you were paying for your daughter’s wedding. And if your corporate card only has a $25,000 limit, the reported balances from this card may jeopardize you ability to get an A-paper mortgage in the months following the show, even if your personal cards are paid off every month.
The experts at Conquer Credit deal with the complexities and pitfalls of FICO scoring daily. We can help you and your company navigate the marshes of automated credit scoring and standardization. Whether you need to qualify for a mortgage or for membership on the board of a local bank, we can help present the truth about your financial profile.
Don’t let an automated system decide how you are represented to the financial world; let us inform and support you before you have a nasty story to tell. Call our team of experts and gain more information and knowledge about Conquer Credit services today.