What’s more disturbing still is
that lenders do not educate
borrowers about the
complexities of credit so that
they can make intelligent
borrowing decisions. Of
course, we are not schooled
in these credit vagaries. We
are told only to pay our bills
and we’ll have a good credit
score. The secret is that
“paying your bills” on time is
only one of 40 activities on
your credit profile that FICO®
measures. Once again, our
ignorance of those other 39
criteria leaves us in mystery Your personal credit identity is the single most important feature of a
as to how to positively affect highquality credit profile. Lenders, credit bureaus, and FICO® do
our fundability and our credit not think of you as a person in the traditional sense. You are an
approvals. identity—a data set that they can quantify and track. Since you were
never taught how to correctly apply for credit, you probably applied
The second contributing using various versions of your name and different addresses. Since
factor to your fundability is the credit bureaus collect every scrap of data you submit in your
the quality of your credit applications, they have a record of every version of your name,
profile. Your credit profile every address you’ve ever applied under (even Aunt Mae’s where
breaks down into five distinct you spent the summer). Credit bureaus do this so they can collect
areas: your identity, your and merge all your data to better identify you. The bureaus have
revolving accounts portfolio, spent tens of millions in data development and management, when
your installment loans it seems to me that it would just be simpler for them to instruct
portfolio, inquiries, and borrowers how to establish a credit identity and use it consistently
derogatory or negative when borrowing. But alas, such is not the case. One of the first
indicators (late pays, things you will see when you pull you're myFICO.com credit report
collections, liens, judgments, is the veritable mess of inconsistent information that is listed under
and other types of score your personal information section (credit identity). It is vital that you
limiting data). Let's take present a single, clear, and concise identity to your current creditors
these one at a time. as well as any future lenders.
Are you FUNDABLE, or Do You Just Have a Good Score?