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On Wed, Nov 28, 2007 at 11:57:44AM +0000, Andy Smith wrote:
>
> It is
> difficult to understand how something with no credit facility (e.g.
> a bank account with no overdraft facility, and a debit card to go
> with it) would require it. There is probably a reasonable
> explanation.
>
1/ The problem is cheques and debit cards. As an example people under 18 are not
normally allowed accounts with either. Instead they are opened bank accounts with an
"electron" card or some such. This differs from a normal debit card in that it
checks that there is money in the account before authorising the expenditure. This
requires real-time links to the bank. Normal debit cards just debit the bank account
and the actual transaction takes place the next day
2/ For information. Credit scoring is more accurate and reliable that individually
approved credit. From memory there are two sorts of credit scoring
- Scores derived on who you are.
eg: do you own your house, what is your salary etc etc
- Scores derived from your behaviour
eg: what is the average balance in your accounts, how many times have you gone
overdrawn
The second time of scoring is I believe more accurate but is much more expensive to
acquire the data. Please note that the data has to be acquired from a "population"
that is appropriate.
Banks then from the credit score run test samples and monitor the success rate. From
the test samples they may then adjust their overall scoring parameters.
http://en.wikipedia.org/wiki/Credit_score_(United_States)
the Fair Isaac Corporation has disclosed the following components and the
approximate weighted contribution of each:
* 35% — punctuality of payment in the past (only includes payments later than 30
days past due)[citation needed]
* 30% — the amount of debt, expressed as the ratio of current revolving debt (credit
card balances, etc.) to total available revolving credit (credit limits)
* 15% — length of credit history
* 10% — types of credit used (installment, revolving, consumer finance)
* 10% — recent search for credit and/or amount of credit obtained recently
--
Henry
Wed Nov 28 13:16:20 GMT 2007
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