How is my credit score calculated?

 This question is one of the most frequently asked by members. Credit scoring is a closely guarded and proprietary product.  Fair Isaac owns the rights to a credit scoring model called FICO.  It is used by credit reporting agencies and tells a lender how likely a person is to repay a loan and make payments on time.  Simply, scoring identifies risk.

 Is your credit score important?  Yes, it is, but it is not the only aspect of the credit decision process made by credit granting companies.  Lenders look at a variety of information such as your employment, ability to repay the loan, collateral and the current economic environment.

 Here's a brief summary of FICO score factors and estimated percentage of your score in the category


Payment history                                                                                                          35%

        Have you repaid prior obligations such as credit cards, installment (auto) and real estate loans?

        Public records include collections, judgments and bankruptcy?

        How late are your payments - 30-60-90 or more past due?

        How many accounts have good payment history?


Amounts owed                                                                                                            30%

        Owing a large amount of money may indicate that you are overextended.

        The amounts owed on different accounts including credit cards or auto installment loans.

        The number of accounts that have a balance; a high number indicates possible     over-extension.

        How many accounts have a balance; again, a high number raises concerns

        Have your installment loans been paid down?

        How long have your accounts been opened?


Length of credit history                                                                                               15%

        How long have your credit accounts been established, in general?

        How long has it been since you used certain accounts?

        How long have specific credit accounts been established?


New Credit                                                                                                                  10%

         How many new accounts do you have?

         How recent have the accounts been opened?

         Do you have an excessive amount of credit inquiries by credit firm?


Types of credit                                                                                                            10%

         A good mix of credit accounts is good; too much of one type can be problematic.



         Credit scores from each credit report agency only considers data in your credit report history.  The range of credit scores
         typically is 300 - 850.  And remember, the higher the score, the lower the risk.  There is no single "cutoff" score that is   
         used by lenders.

         KaiPerm uses several other factors in the credit decision process.  For one, your relationship with the credit union is very
         important.  Direct Advantage members, for example, receive a two percent discount from the normal stated interest rate on
         credit union loans!

         Importantly, the credit union does not "risk rate" borrowers.  Members receive the same interest rate; KaiPerm is a cooperative
         and it's our philosophy that all members receive competitive rates on their loans.

 Need help or have questions, give us a call.  We are here for you and to help you Get Ahead Financially.