Credit and…Pirates!?

It’s International Talk Like a Pirate Day, September 19th, 2018! In honor of such a prestigious and momentous event, we wanted to breakdown the origin of the first corporations (pirates!) and give a brief letter of encouragement to all sailors on the sea of life in search of major treasure and fine trinkets (i.e. financial success), as we are currently living in an economic environment that is not friendly to the individual.

Wait what?

Back when our government was trying to figure out the major fiasco of the 2008 financial crisis and global credit crunch, Dr. Peter Hayes published a paper titled ‘Pirates, Privateers and the contract theories of Hobbes and Locke’. He stated that pirates were the originators of modern democracy because of the way they ran their ships:

“Pirates elected their captain, voted on major decisions and distributed their booty in roughly equal shares, and there is something in the idea that a pirate ship is the equivalent of a modern corporation.”

The way buccaneering was approached back in these wild times was that a person would find a crew, appropriate a ship, then sail the seven seas in search of gold. This is much like modern venture capitalism, the prospect of risk vs enormous rewards. Those rickety old vessels were the equivalent of modern corporations, which, in search of their bottom line, are out to appropriate every dollar they can pull in.

The problem comes about when certain rules apply for individuals, but not for a select few corporations. Remember when the big banks, the root cause of the total economic meltdown in 2008 were bailed out by the government, or that during the Obama years, the top 1% captured over half the economic gains while the bottom 99% never recovered from the crash?

Dr. Hayes says:

“Pirates had a democratic structure and relative equality, but they were doing all of this to violate the rights of other people. The idea of a social contract is that it protects human rights. But what if you create a social contact to say that we’ll observe rights towards each other, but we won’t observe rights for outsiders?”

Sound familiar?

This is why we at Boost Credit 101 do everything we can to help people protect themselves (through education) from the dastardly, scurvy tactics of these major corporations, not to mention the obtuse methods and algorithms utilized by the credit bureaus–which are also major corporations.

Hey, remember when Equifax lost half the country’s data and paid zero consequence? But you miss a single payment and your score drops from 780 to 690. Is that fair? No, that’s why using tradelines can be a secret weapon against the unfairness of these massive companies that don’t mind grinding us little folks into the ground.

Take heart mates. We are here to make your lives easier.

So please be directin’ any questions ye may have at any time to us without hesitatin’!


With Great Credit, Comes Great Opportunity


Money is one of the most mysterious things on the planet. It’s the pathway to security, to freedom, to pleasure; it is a festering nuisance because there never seems to be enough of it, or it’s somewhere in between. It’s been around a long time, starting around 9000-6000 BCE when a funky ape named Homo sapiens started domesticating cattle and exerting agricultural control over the environment. In its first iteration, cows and plant products were money, and over millennia it has been salt, rocks, cloth, sticks, gold, silver, paper, and now…numbers on a screen living on the internet as it flies above our heads in waves of electronic ether.

Money is a ledger. It’s a way of keeping track of exchanges. A long time ago that aforementioned ape created the concept of the future, and with that invention, we created credit. Credit gives you the ability to borrow money with the promise of paying it off at a later date. If you’ve got  have great credit you can borrow at the lowest rates offered, and usually that borrowing will take one of the following forms. We’ll start with the biggest first, that shining beacon of the American dream.


Mortgage: Owning a home will allow you to build equity in good markets, and it will allow you the luxury of having a roof over your head with a fixed payment in a falling market. As far as basic human needs go, buying a home gives you shelter (and probably water), with the ability to prepare food, so all human needs are wrapped up in it. No wonder people are so obsessed with buying a home. There are programs with 3% down, 5% down if you don’t mind paying mortgage insurance.

Renting vs buying, that old conundrum. There’s an old adage: buy a home, so you aren’t paying someone else’s mortgage. But even if you can, should you?  Impossible for us to say, as your situation is as unique as you are. The best idea, and it applies to everything financial, is do the math. Click the link for a classic Dave Ramsey rant (Pro Tip: playback at 1.5x to turn 9.58 into 6.39 minutes of your day).


Auto: Everyone needs to get around. That’s the culture we have in America. We are far too spread out to rely on public transportation, and speaking of public transportation has a negative connotation (it shouldn’t) in a lot of cities, so having the ability to get in your own car, turn the key, and get to where you need to be on your own time is something Americans consider a necessity, because it often is. If you need a vehicle, and you can finance it, you don’t have to have perfect credit, but like all loans, the better your credit is, the better the rate is.


Credit Cards: One of the biggest questions we get asked on a weekly basis: how do I get approved for big limit credit cards? Everyone wants that 20-30k (or higher) piece of plastic in their possession. It’s like a badge of honor. The easiest way to get a high limit credit card, is to already have one. Wait what? Yeah, it’s kind of like getting that first job you want. You know, the one where they say they like you but can’t hire you because you don’t have any experience? How are you supposed to get experience if no one will hire you? Life is full of conundrums like that. You could go the short way and get added as an Authorized User, or “tradeline” (industry speak) by talking to a trusted friend, family member, or even buying one. Any of these may increase your chances. Or if you have cards in your name that have perfect (or great) payment histories and you’ve had them for a while you could ask for a limit increase (you can–and should if your income supports it–ask for a limit increase every 6 months on all credit cards). Credit cards offer the ability to earn rewards, sometimes free vacations, the ability to fall back on in an emergency. Some say they are evil, but they are necessary, being as much as 60% of your credit score. Great credit cannot be maintained without them, so get friendly with credit cards, but not too friendly. Make sure you pay the statement balance in full monthly.


Credit is not something that gets taught to the masses.

It’s something that makes most people’s eyes roll back, and we don’t blame them, but having it not only under control but in the stellar category, puts you in a position to accomplish and acquire things that are basically required in this country.

Is it something you understand, something you barely think about, or when someone brings it up you’d rather eat raw catfish liver than even think about it? Again, we don’t blame you, and if you have any questions whatsoever at any time, contact us and we will spend as long as you want making this opaque subject as clear as we can.


FICO Credit Score vs. VANTAGE Credit Score

Credit scores: They determine whether we can buy a home, car and even get student loans. Consumers in general are captive to credit reporting agencies. We expect them to get our payment histories right. For years, FICO (Fair Isaac Corporation) has had a corner on the credit score market. Consumers are not privy to their FICO score and the first sign of a problem is a credit rejection. The rejection reasons for most loans is a low credit score. Over the last decade, a FICO competitor has emerged: Vantage.

What is Vantage?

The three major credit reporting agencies came together and created Vantage. Vantage’s scoring model is different than FICOs model. Vantage uses a shorter look-back period for late payments. They also use a different grading system for charged off accounts. Vantage’s goal was to address a specific need. They believed there as a need for “a highly consistent, more predictive scoring model that is easy to understand and apply“.  Remember, they still look at many of the same factors as FICO, just for shorter periods of time.

Multiple credit score confusion

Consumers have a different credit score depending on the reporting agency. Transunion, Equifax and Experian reports often contain different information. This is due to the various times they pull reports from your creditors. When you apply for a credit card, car loan or mortgage, your lender pulls your credit report. These reports have a FICO score associated with them.  Depending on which report your lender requests, your FICO score will vary. This causes confusion for borrowers who are not provided the same scores offered to lenders.

Vantage Use vs FICO

While some lenders are using Vantage scores, FICO still has a corner on the market. Credit decisions based on FICO scores may be more detrimental to those new to the credit markets. The fact is, like it or not, most major lenders still use FICO to make lending decisions. Borrowers with a strong FICO score are more likely to have their request approved.  Low credit scores likely mean a rejected request. This applies to credit cards, car loans and home mortgages and is not shocking.

What does this mean for consumers?

Not much. Access to credit will vary little regardless of whether a lender uses FICO or Vantage. Consumers will have the same access to credit regardless of which score the lender uses. Since a small minority of lenders are using Vantage, you won’t see any changes in your ability to borrow. For young borrowers, lenders who use Vantage may offer them a slight edge. The problem is finding these lenders may be challenging.

FICO versions: What you may not know

Early in 2016, FICO released FICO9. Most lenders have not adopted this version of your score. Chances are high they will not adopt this model either. The reason is simple: Many lenders are using older models for credit decisions. For example:

  • Car loans– The three major reporting agencies use FICO Auto Score most of the time. Depending on the lender, they may use version 2, 4 or 5.
  • Credit cards– Credit card companies prefer FICO Bankcard Credit agencies often still use versions 2, 3, 3 4 and 5.
  • Mortgage loans– This is perhaps the most complicated scoring. Experian uses FICO Score 2, Equifax uses FICO Score 5 and Transunion uses FICO Score 4.

Consumers who are considering applying for credit should pull a free credit report. Verify all information in your report is correct. Understand what factors go into determining your credit score. Don’t open up credit lines you don’t need, make your payments on time and keep your balances low. This is the path to a higher FICO score which you’ll most likely need if you apply for a home mortgage or car loan.

Leasing vs Purchasing an Auto

Determining whether it is more economical to lease or buy a car is not simply a matter of looking at the monthly cost or the purchase price. Instead, to get a complete picture, numerous factors need to be taken into consideration.

A Look at Monthly Payments

In terms of monthly payments, leasing tends to be the more economical choice. For example, a sedan that costs $24,775, including leasing fees, results in a monthly payment of $294. In comparison, after a down payment of more than $4,000 on the same new car, the owner pays $400 a month. Purchasing a used car, such as a three-year-old sedan, drops the purchase price to an average of $15,688 with a down payment of $2,304 with a resulting monthly payment of $301.

Other Factors to Consider

When it comes to leasing and buying a car, each option carries unique expenses that need to be factored into the purchase price.

  • Interest Rates

Buying a car typically means taking out a loan with its accompanying interest rates. Consumers purchasing a new car tend to have better credit scores, according to data gleaned from Edmunds. This puts them in the position of being offered lower interest rates — often several percentage points lower when compared to those extended to buyers of used vehicles. Additionally, finance companies often offer special financing for purchasers of new vehicles.

  • Repairs and Maintenance Costs

Leasing a car typically means not being responsible for the costs of repairs and maintenance beyond tire rotations and oil changes. However, some lease agreements include a free maintenance program that eliminates even these expenses. Buying a car means the owner foots the entire cost with used cars likely needing more repairs.

  • Insurance

When a consumer purchases a car, they are typically required to maintain full insurance coverage on it for the duration of the loan. A lease agreement, on the other hand, might include a requirement for additional insurance which increases its costs.

  • Ownership

One reason that people hesitate to lease is that they don’t own the car at the end of their lease. However, they often have the option to purchase the vehicle at what is typically the current market value.

The Bottom Line

Leasing is often a more attractive option when it comes to out-of-pocket expenses, especially when compared to purchasing a new vehicle. For the long term, though, because the consumer now owns their vehicle, their costs are actually lower compared to someone who leases the vehicle. That person would either need to purchase a vehicle or enter into another lease agreement in order to obtain transportation.

How Many Credit Scores Do You have?

Do you know you have lots of credit scores? You do, and different lenders use different scores to determine your credit worthiness. Your credit score is a number determined by ranking items on your credit record and then taking those rankings to calculate your credit score. Complicating things is that each of the three major credit reporting agencies (Transunion, Experian, and Equifax) use slightly different criteria when computing your credit score. So, to start, you have 3 different credit scores. But, those credit scores are based on information from Fair Isaac Corporation and is known as your FICO score. But, the credit reporting agencies pay FICO for credit scores and in 2012 created a competing credit score called Vantage. As with FICO, each agency uses slightly different criteria so you have different Vantage scores with each agency. That brings the total number of credit scores to 6.

Both FICO 8, the most common score from FICO and Vantage scores calculate credit scores on a scale of 300 to 850. Both models return similar but not identical credit scores.

More Credit Scores

Other companies provide credit scores too, but the most popular are FICO and Vantage. However, FICO has at least 49 different scores according to the Consumer Financial Protection Bureau (CFBP). They include older versions of FICO and some industry specific scores.

The newest FICO score is FICO 9, but the one used by most lenders is FICO 8. Even with so many different credit scores, the key to a good credit score is that consumers manage their credit responsibly – for Vantage and FICO scores this means:

  • All bills are paid on time
  • Credit card balances are low – less than one-third of available credit.
  • New lines of credit are opened only when needed

Authorized Use of Credit Cards

Some people think that by becoming an authorized user (AU) of someone else’s credit card they can quickly improve their credit score. And, being an authorized user does help, though if someone has many negative marks and excessive inquiries the help will not be drastic.

Take Away

  1. Consumers have more than one credit score
  2. FICO is owned and operated by the Fair Isaac Corporation. FICO provides many scores, some are industry specific.
  3. The three largest credit reporting companies developed vantage scores. Vantage and FICO scores both use a 300 to 850-point score. They parallel each other and the higher the score the better you are as a credit risk. Higher scoring consumers get more favorable loan terms.
  4. FICO 9 is the newest iteration of the FICO credit scores, yet FICO 8 is the most popular.
  5. Being an AU helps with credit scores, how much depends on what’s on your credit report already.


A Primer for Your Consumer Rights When Contacted by a Debt Collector

Imagine you are home, the phone rings, as soon as you say hello the person on the line informs you that the call is a debt collection call. You don’t remember owing any entity or person anything and ask for information about the debt. The caller tells you the debt is four years old and they are with a collection company assigned to collect it. Do you pay it? What should you do? If you owe a past due debt, or someone informs you that they are contacting you to collect an old debt you have rights. These rights are enforced by the Federal Trade Commission and the Consumer Financial Protection Bureau.

Your Rights as a Debtor

  1. Although debt collectors may call you at home, they cannot call until after 8 AM in the morning and not call you after 9:00 PM. A debt collector cannot contact you at work if you inform them orally or in writing that your employer doesn’t allow you to get non-work related calls.
  2. After a debt collector contacts you by phone, they have five days to send you a document called a “validation notice” that tells you whom you owe and the amount of money you owe. This notice also must tell you how to proceed if you don’t believe you owe any money to the creditor.
  3. After you receive the validation notice you have 30 days to dispute the debt. However, a collector can contact you if it sends you written proof of the debt such as a copy of a bill for the amount that the collector is attempting to collect.

What Debt Collectors Can’t Do

Collection laws are consistent at the federal and most state levels of government. These laws forbid collectors from:

  • Harassing you with threats of violence or harm; using obscene language; threaten to publish your name as a poor credit risk; repeatedly using the phone with the purpose of annoying the debtor
  • Making false statements such as claiming you committed a crime; falsely claim they are an attorney or government representative; that they work for a credit bureau, lie about the amount you owe.
  • Other things debt collectors cannot do include telling you that you will be arrested if you don’t pay the debt or they will seize your property or wages (unless the law allows them to do so).

What Steps Can I Take for a Debt Collection Violation Against Me?

You can contact an experienced debt collection attorney to file a lawsuit against the debt collector. Other alternatives include contact your state Attorney General’s Office, the Federal Trade Commission, or the Consumer Financial Protection Board.

If you fail to notify the debt collector in writing within 30 days of the first contact with you that you dispute the debt, you will give up most of your debtor rights.

CPNs: The Real Story

Your credit is in disarray. You have overdue payments, missed payments, collection attempts and other derogatory information on your credit report. Things cannot get worse. Can they?

Yes, they can. Pay a CPN (Credit Privacy Number) broker for a CPN number and you could go to jail for fraud.

Credit Privacy Numbers go by many names including:

  • Credit profile number; and
  • Secondary credit number (SCN)

There is much debate on message boards concerning their legality for use as a credit repair tool. The information available from trusted authorities suggests their use is often an attempt to break the law concerning a person obtaining credit. It is likely that an offer to get you a CPN by any name is an invitation for you to become involved in a scam. Unfortunately, your use of a CPN to get credit can lead you to a large fine or time in prison, even if a borrower believes that the CPN is legit.

A CPN is a nine-digit number that looks exactly like your social security number. The Credit Repair Organizations Act is a federal law that regulates how credit repair companies do business. The act prohibits untrue or misleading advertising, payment before services are received, and that credit repair contracts be in writing. You have other rights under the act that includes:

  • A legal contract
  • A three-day cooling-off period
  • The anticipated amount of time your credit repair will take
  • Your total cost for the service
  • Guarantees made by the credit repair company

In addition, the law forbids consumers from opening a second credit file thus making a CPN illegal for credit repair purposes.

Often, shady credit repair companies advertise their ability to get you a new CPN. Most of the time you don’t get a unique CPN if you get any number, it is probably a stolen social security number. In either case, using a CPN or SCN instead of your social security number is fraud making them illegal for purposes of obtaining credit or a loan.

In 2013, 18 people were arrested for participating in a scheme to defraud Social Security using CPNs. David Day was among those arrested who, as a group, consisted of buyers and sellers of CPNs. Day not only sold CPN numbers, he also used them to obtain loans and credit lines. Day was accused and convicted of using a Social Security number frequently and was sentenced to 7 years in prison.

Take Aways

  • There are no “quick” ways to repair your credit
  • A Credit Privacy Number is not a legal substitute for your Social Security Number and cannot be used to obtain a second credit file.
  • Credit reporting agencies and those giving credit don’t want your CPN, they want your Social Security Number. While you don’t have to give them your social security number, they don’t have to give you credit without it. The lure of starting fresh without rebuilding your credit is a hook that unscrupulous credit repair agencies use to reel you in. Don’t fall for the scheme. It’s better to spend your money on a legitimate credit repair agency. Do a little research before you sign up. Check the Better Business Bureau ratings for credit repair companies, less than an A rating means caution on your part. In addition, check to make sure the credit repair agency you want to use is accredited by The National Foundation for Credit Counseling.

6 Wacky Credit Myths

People have some strange ideas, bigfoot, the Loch Ness Monster, Kim Kardashian being worthy of attention, but none of these are going to do you much harm, and they may even be fun, or at least entertaining. But myths about credit can be damaging, to your reports, and especially to your finances.

Here are six odd viewpoints/questions we’ve addressed in our time as credit consultants.

1. I’m not looking to get any credit cards, a mortgage, or a car, so I don’t need credit.

Credit is not just about getting loans. Just a few examples, your employer may check your score when you get hired, or any time you are employed. If you want to rent, most places worth renting from will check your score. When it does come time to get a loan, a good credit history and score (760+) will get you the best rates, saving thousands, or even tens of thousands over the course of the loan. Your FICO is important. According to a The Fair Isaac Corp’s testimony before a House Financial Services subcommittee, FICO scores are used in approximately 10 billion decisions annually.

2. I’ve got a great credit score, so I don’t need to worry about it.

You are the warrior upon the wall watching for ninja surprise negative marks. How do you avoid them? Constant vigilance! You don’t need to check your score every day, but pay your debts on time, never miss a payment, don’t rack up balances, keep an eye on your reports to make sure anything you didn’t authorize shows up.

A good FICO score is like getting in great shape. Once you achieve that beach bod, you have to maintain it.

3. I only have a credit card, I better get a car so I can show installment credit.

This is a great place to give a reminder on how credit scores are calculated.

Payment History — 35%, pay your debts on time, even if it is only the minimum

Amounts Owed — 30%, especially on your credit cards vs. how much limit you have available.

Length of History — 15%, how long your accounts have been open. Hey, age does have its benefits!

Types of Credit — 10%, variation is good, you want a mix of installment (student, auto, mortgage), revolving (credit cards)

Inquiries — 10%, too many inquiries can drastically drop your score, keep it under 6/year max if you can

Here you can see how FICO tabulates those all-important scores. It’s always good to have different types of credit, but asking for credit/debt to solely get a better score is foolish. You will shorten your history with a new account, take a hit from the inquiry, and that’s if you get approved. If you don’t, you will only cost yourself points. You need a car to get around? Buy a car. You need a place to live? Buy a home, but never because you think it will help your score.

4. I want/need some type of credit; I’ll just submit an application and see what happens.

See above for how inquiries affect credit, and take our word on this: DO NOT DO THIS. Every inquiry counts against your scores. And too many inquiries will make you seem high risk, which could prevent you from getting approvals even if you have good scores. The only time you should be applying for credit is when you need it, and when you think you have a good chance of approval.

5. I’ll keep a balance on my credit card because that helps my credit scores.

The credit bureaus usually get updated balances once a month on your debts. When this happens is usually around the statement date of your card, so if you pay off the statement balance, it will still show the balance as it takes a few days for the data to get reported.

Keeping a balance from previous statements will only do one thing, cost you $$ in interest fees. You should never pay interest unless you absolutely have to, and then only if it is of the installment variety (auto, student, mortgage). Revolving accounts (credit cards) compound daily, which makes the balances difficult to pay off.

6. I pay my rent/utilities on time, so I should have a good credit score.

This is pretty much the equivalent of “I’m thinking good thoughts, so people should like me.” One doesn’t have anything to do with the other (but still think good thoughts!). Rent and utilities are not things that get reported to the bureaus, with one exception. If you are behind, and consistently behind to the point where the landlord or utility company believes they will not get their money, they may report you to a collection agency, and this can hurt your credit.

So there you have it. Don’t fall victim to strange thoughts when credit is involved, and check back to see more myths debunked, or contact us if you have any questions.


You got REJECTED – What Now?

You applied, got rejected — what now??

You’ve decided to apply, and the possibilities dance tantalizingly in front of you, for that credit card you’ve been eyeing, that sexy piece of plastic that opens doors to new possibilities—that you won’t max out and will remember to pay off monthly…

Or that car you’ve been dreaming of putting yourself in and cruising around town…

Or jangling those keys to your new home, finally building equity instead of paying someone else’s mortgage…then you or an agent hit the submit button, and there it is:


Few things can give us the visceral, complex emotion that feels like putting your tongue on a battery and someone insulting your mother at the same time. But getting rejected when you apply for new credit is definitely one of them.

There are any number of reasons you were rejected, and your immediate reaction might be, “Well the hell with you, I’ll try somewhere else and they will approve me.”


Before you do anything, the following rule should be considered:

A rejection is a red light. 

You need to know why you were rejected.

There are too many reasons, and too many lenders with different criteria to get into specific details of why you could have been possibly rejected, but good news, you will be able to find out exactly why, as the lender will tell you, sometimes in person if you are dealing with an agent, sometimes through the mail if it is an online application.

Let’s ask this question: How was it that you approached that application? Did you approach just to see if you could, or were you confident you would? And if you were confident you would, does that mean you don’t know what you’re doing?

Probably, but that’s okay. This stuff is complicated and as fun as watching grass grow. It’s also necessary, so the more you know, the better you’ll be.

Here are 3 tips to help you if you find yourself in this situation:

Tip #1 – You should always have some awareness of where your credit sits. Either by checking into it on a more frequent basis than the one time after you get rejected, or setting up alerts to notify you if negative information (or any information) appears on your report. This can be accomplished through any number of online credit monitoring services. Credit Karma is a good we like here. It’s free, gives access to two reports, and updates on a weekly basis. It does use the Vantage Score model, not FICO, so take the scores with a grain of salt. You get what you pay for, and since you pay nothing, the value is good and you can see the relevant data.

There are many, many other sites to choose from if you wish to put down some coin to get higher quality services.

Tip #2 – Just wait for a moment. The lender you applied to will send you a letter telling you why you got rejected. This does take a few days, but calling in does you no good. Any representative will refer to the pending posted letter. If the application was taken in person the agent or seller should be able to get you a copy of your report and give you some advice on how to proceed, remove negative marks, buy tradelilnes, etc.

Tip #3 – Diagnose the reason(s) you were rejected. There is always some action you can take to get your reports in better shape. Some things only time can heal—recent missed payments, currently late accounts—but most everything else can be worked on immediately, and possibly remedied within a month’s time.

And that’s it. As always, we are open to discuss how we can out with any credit questions or needs you may have.

Bankruptcy Risk Score by Gene Kaur

Person’s bankruptcy risk score is a number that indicates how likely an individual is to file for bankruptcy in the future.  It is similar to credit score, which is also used to assess the responsibility of a particular borrower and the liability they pose when lending to them.  However, bankruptcy risk score is much less commonly known than credit score.  Unlike with credit scores, there are few resources available that allow a consumer to discover the value of their bankruptcy risk score, or to learn about ways they can improve it.

Until about 20 years ago, there was no clear information available to consumers to even indicate that the concept of a bankruptcy risk score existed.  Today, credit reporting agencies will provide consumers with a report including their credit score on request; certain agencies are required to do so once per year in the United States.  However, no similar affordance is made for bankruptcy risk score.  Even though a low bankruptcy risk score can be used as justification for denial of a lending application, the lending organization is only required to indicate that the reason was a low bankruptcy risk score, not what the low score actually was.

Some private organizations do offer reports on bankruptcy risk that include scores similar to bankruptcy risk score.  Generally, these reports are based on account data, but these services are more often seen geared towards businesses looking to predict their customers’ risk of bankruptcy than the consumers themselves.  An example is Experian, one of the primary credit monitoring agencies, which offers this type of bankruptcy prediction service to businesses; the service provides a score from 1 to 1400 that indicates the likelihood of bankruptcy on an account within the next two years.

The ambiguity of bankruptcy risk score from a consumer perspective is exacerbated by the fact that unlike with credit scoring, there is no known standardized index of bankruptcy scoring.  In the United States, credit scoring is maintained by three primary credit reporting agencies, each of which provides a standardized scoring index; one or more of these indexes is referenced when a credit decision including a credit score is made.  Bankruptcy risk score has no standardized public index of measurement, meaning consumers are only able to get general information about their bankruptcy risk from a single source, rather than being able to compare their findings on a standardized scale.

Works Cited

“Bankruptcy PLUS – Predict Potential Bankruptcy.” Experian. Experian Information Solutions, Inc., n.d. Web. 10 Feb. 2016. <>.

Simon, Jeremy M. “Are You a Bankruptcy Risk? Enigmatic Score May Tell Lenders.” CreditCardscom News. N.p., n.d. Web. 10 Feb. 2016. <>.

Yuille, Brigitte. “Do You Know Your Bankruptcy Risk Score?” Bankrate. N.p., n.d. Web. 10 Feb. 2016. <–1.aspx>.

About The Author:

Gene Kaur has over a decade of experience in the upper management positions at several well known financial institutions and now shares his wealth of knowledge and experience to help others break free of their financial problems.