Credit damage occurs when negative information appears in a credit report or other credit file which causes an individual or business to lose access to credit either in the same amount or at a cost similar to the cost available prior to the damage to credit. If the credit damage was caused by the actions of another, it may be a matter for litigation. If the damage to credit was self-inflicted, it is not a matter for litigation.
All credit scores are not FICO scores. Each consumer credit grantor, like a bank or other federally involved lender, whether for a mortgage, a car loan or a credit card, has their own proprietary/special “credit score” which they use internally when processing a loan application. Before they accept a loan or credit application, lenders rely on a credit score that comes with a credit report, if the score is requested. At this ‘preview’ point, the credit score assists the lender in deciding if they will accept a formal credit application. If the score is high enough, typically an application is accepted. FICO scores typically range from a low of 300 points to a high of 900 points. Typically, in 2012 and 2013, the score must be above 600 for a credit grantor to accept the application. It is not automatic for the score to be included, because there is a fee charged by the FICO company every time they provide a credit score for the person whose name is on the credit file. It is not automatic for the high credit score to cause loan approval. It is automatic for a low score to automatically trigger application denial. In addition to providing a credit score to assist lenders in pre-qualifying a loan application for processing, the FICO Co – which used to be the Fair, Isaacs and CO (FICO) – has provided computer modeling services for the hundreds of American lenders in the development of their own internal special score. The second score which is the internal lenders score is the interest rate setting score. This score is very similar to the ‘pre-qualifying’ score with a major difference. Each lender has developed a sharper profile of features which they want their borrowers to have. For instance: different marriage time, time at the job, savings on deposit, etc. There are anywhere from about 75 to about 125 borrower profile points that develop the lenders internal internal credit score. The borrower profile points are all very secret, so that no one can intentionally manipulate their credit scores. So while the credit report with a credit score is important, be aware that most people have about 5 credit scores and they can vary by about 100 points. Only one of those credit scores is really the important one.