The first credit score system came into existence in 1956 when a gentleman called Bill Fair teamed up with Earl Isaac to form Fair, Isaac and Company with a view to designing and marketing a standard, impartial credit scoring system. They made the first commercial sales of their new system two years later, and nowadays, their company still exists as is known as FICO.
Over the following years, the sales of FICO’s analytical tool expanded dramatically, and such is the success of their credit scoring software that now over 90% of leading lending companies subscribe to it.
Hiding credit scores from consumers
When credit scoring was first used, it was only available to companies whose business it was to extend credit and loans. Credit scores were not at that time made available to consumers themselves. It would have been a violation of the agreements signed between FICO and the various credit bureaus to share this data with individual consumers.
Back in the early days, not many people were even aware of the existence of these checks and as the light began to dawn, nobody knew how they were compiled or used, let alone how one could improve their scores. The companies that used them all thought that consumers would find them hard to understand and would be confused by them.
The savvy consumer of the 21st century
Today, consumers are much savvier, and nearly everyone is aware of the existence and importance of these scores. If you would like to find out more about your own credit score, there is a useful article on the wonga website.
But c’mon now; be honest. When did you last check your credit score? The most likely answer is that you never have. Even though all South Africans are legally entitled to one free credit score per annum, only 3% of the 24.25-million credit using consumers ever order one. Often, the first time they ever think about them is when they have been blacklisted and refused credit. Don’t let this happen to you.
Stand up for your rights
It is not uncommon for incorrect data to be included in your credit report, and this can adversely affect your rating. There are two things you should know about. If you find a bogus item on your report, you have the legal right to file a dispute claim with the appropriate credit agency, or you can get in touch with the Credit Ombud.
The other thing you should know is that 70% of the consumers who do refute erroneous entries on their credit reports have them removed.
Your credit score is important to you. It determines your credit acceptability and how much getting credit can cost you. Make sure you look after your individual score.