Determining Credit Profiles

Consumers with good credit will have demonstrated a "paid as agreed" credit history for at least three years. "Unapplied for" derogatory items on the credit report such as medical bills, and civil judgments from non-creditors are often ignored.

Good Credit Consumers have had "paid as agreed" installment credit such as a mortgage or an auto loan within the last three years. Major derogatory items such as a repossession or bankruptcy have never happened or occurred well over three years ago.

Consumers with a fair credit history will have demonstrated a "paid as agreed" credit history for at least two years. They may have had an occasional late payment.

Consumers without "paid as agreed" installment credit such as a mortgage or an auto loan within the last two years should have a substantial history of good revolving credit. Major derogatory items such as repossession and bankruptcy should have not happened or occurred over eighteen months ago.

There are consumers with a situational credit problem. You can usually identify a significant economic disaster or event that caused the credit situation to take a downward turn. For example:

• A Divorce.
• Illness or injury.
• Loss of employment.
• Bankruptcy due to medical problems or loss of income.

Consumers with bad credit may have numerous charge-off accounts such as bad checks, unpaid medical bills and utility bills, small unpaid charge accounts, and unresolved repossessions that are over two years old. For those with no credit, there will be a lack of any kind of credit history, or it will be extremely limited.

There are consumers with credit problems that cannot be isolated to a single event just a long term history of bad credit. For example:

• Multiple bankruptcies.
• Multiple repossessions outside of bankruptcy at different times.
• Significant bad credit after a bankruptcy.
• Current delinquencies on all existing obligations.
• Repossessions less than one year old.
• History of writing bad checks over a long period of time.