How important is Point Deduction Technology®?
Credit Scoring is a number generated also by a mathematical Algorithm – An Algorithm is defined as a set of rules for solving a problem in a finite (gathering of possibilities) numbers of steps, as for finding the greatest common divisor. FICO and Vantage Score built the most commonly used Algorithm based on credit data provided to the major credit bureaus, Transunion, Equifax, and Experian. The data comes from creditors on tens of millions of people. Your credit is cross referenced to the tens of millions of people’s credit data and a number (credit score)is assigned. Both FICO and Vantage Scores range from 300 to 850. This number determines the probability on how likely you are to pay your bills on time.
Point Deduction Technology Software also analyzes each tradeline from all three credit bureaus, Transunion, Equifax, and Experian to determine the differences and similarities on your credit file. Unlike credit scoring models which only provides an accumulative score, point deduction technology software posts the accumulative deductions but also posts the deduction on each individual tradeline account.
Point Deduction Technology Software doesn’t just look for the potential point recovery but also highlights where most errors occur on a credit report, provides short and long term recommendations on how to recover some or all of the missing points but also determines the best balance, day to pay, day to charge, and the best day to have your credit looked at for financing.
Untested Scoring Formulas
Unlike other scoring algorithm products, Point Deduction Technology Software was created for individuals not just companies to get a better understanding on how the individuals score is derived. With credit scoring ranging from 300 to 850, there are 550 points to analyze.
Even if all credit data regarding consumers held at credit repositories were accurate, complete, and current, there would be significant concerns about the fairness of automated credit scoring programs. Converting the complex and often conflicting information contained in credit reports into a numerical shorthand is a complex process, and requires a significant number of interpretive decisions to be made at the design level. From determining the relative influence of various credit-related behaviors, to the process used to evaluate inconsistent information, there is a great potential for variance among scoring system designs.
Inaccurate Credit Reports
A Federal Trade Commission study of the U.S. credit reporting industry found that five percent of consumers had errors on one of their three major credit reports that could lead to them paying more for products such as auto loans and insurance.
Overall, the congressionally mandated study on credit report accuracy found that one in five consumers had an error on at least one of their three credit reports.
"These are eye-opening numbers for American consumers," said Howard Shelanski, Director of the FTC’s Bureau of Economics. "The results of this first-of-its-kind study make it clear that consumers should check their credit reports regularly. If they don't, they are potentially putting their pocketbooks at risk."
The study, in which participants were encouraged to use the Fair Credit Reporting Act (FCRA) process to resolve any potential credit report errors, also found that:
- One in four consumers identified errors on their credit reports that might affect their credit scores;
- One in five consumers had an error that was corrected by a credit reporting agency (CRA) after it was disputed, on at least one of their three credit reports;
- Four out of five consumers who filed disputes experienced some modification to their credit report;
- Slightly more than one in 10 consumers saw a change in their credit score after the CRAs modified errors on their credit report; and
- Approximately one in 20 consumers had a maximum score change of more than 25 points and only one in 250 consumers had a maximum score change of more than 100 points.
Target Score Simulator®
Point Deduction Technology Software determines the impact errors and omissions cause and provides remedies to recover some or all the lost points back.
Target Score Simulator is an innovative product allowing you to enter a target score and based on credit data will provide a plan to achieve the score.
The Score Simulator extracts your credit data and adds the assigned point deductions. This information, along with the ability to change the status of each account, allows you to build a plan through several scenarios enabling you to capture and/or build points.
It's important to be provided with necessary recommendations in order to maximize your score.